What are Reverse Exchangeable Notes?

Reverse Exchangeable Notes are a type of structured financial product. Typically, they offer a fixed coupon payment, but the principal repayment or return at maturity is linked to the performance of an underlying asset, such as a stock. If the underlying asset's price falls below a certain level, the investor may receive the asset itself (or its cash equivalent) instead of their full principal back, potentially resulting in a loss.

What is the significance of the tax opinion from Davis Polk & Wardwell?

The tax opinion provides a legal assessment from a reputable law firm regarding the tax treatment of these Reverse Exchangeable Notes for investors. This is crucial for investors as it helps them understand the potential tax implications of holding and receiving payments from these notes, which can influence their overall investment decision.

What is the relationship between JPMorgan Chase & Co. and AT&T Inc. based on this filing?

This filing indicates that JPMorgan Chase & Co. is issuing a financial product (Reverse Exchangeable Notes) whose value and payout are tied to the stock performance of AT&T Inc. It does not imply any direct corporate ownership or operational link between the two companies beyond this specific structured note offering.

What is the investor's risk with these notes?

The primary risk for investors is that the value of the AT&T Inc. common stock could decline significantly by June 13, 2008. If the stock price falls below a predetermined threshold (often referred to as a barrier price), the investor might receive AT&T stock or its equivalent cash value, which could be worth less than the initial investment amount, in addition to the coupon payments received.

JPMORGAN CHASE & CO 8-K SEC Disclosure

Summary

This Form 8-K filing by JPMorgan Chase & Co. on December 12, 2007, primarily serves to disclose an exhibit. Specifically, it includes a tax opinion from Davis Polk & Wardwell concerning the issuance of 5.70% (equivalent to 11.40% per annum) Reverse Exchangeable Notes due June 13, 2008. These notes are linked to the common stock of AT&T Inc. For investors, this filing signals a specific financial product being offered by JPM, backed by the performance of AT&T stock. The nature of these notes as "Reverse Exchangeable" suggests a structured product with defined terms and potential outcomes based on the underlying AT&T stock price at maturity, with a coupon payment and potential exchange into AT&T shares or cash. The tax opinion indicates a formal assessment of the tax implications for holders of these notes.

Key Highlights

1JPMorgan Chase & Co. issued a Form 8-K on December 12, 2007.
2The filing's primary purpose is to report an exhibit.
3The exhibit is a tax opinion from Davis Polk & Wardwell.
4The tax opinion pertains to Reverse Exchangeable Notes.
5The notes have a coupon rate of 5.70% (11.40% per annum).
6The notes mature on June 13, 2008.
7The performance of these notes is linked to the common stock of AT&T Inc.

JPMORGAN CHASE & CO 8-K Report, Exhibit Filing (Dec 12, 2007)

Summary

Key Highlights

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