8-KShareholder MattersCorporate ChangesOther Events+1

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Aug 21, 2008)

Filed August 21, 2008For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. filed an 8-K on August 21, 2008, reporting the completion of the issuance and sale of 180,000 shares of its 8.625% Non-Cumulative Preferred Stock, Series J. These shares were issued through depositary receipts, with each receipt representing 1/400th of a share. The issuance was conducted under the company's effective Form S-3 registration statement and an underwriting agreement dated August 14, 2008. This preferred stock issuance establishes specific dividend and liquidation preference rights. Importantly, the terms of the Series J Preferred Stock include restrictions on the company's ability to pay dividends or make distributions on its common stock or junior preferred stock if dividends on the Series J Preferred Stock are not paid. The filing also includes the Certificate of Designations and a Replacement Capital Covenant, which notifies holders of specific subordinated debentures about their rights under this new covenant.

Key Highlights

  • 1JPMorgan Chase & Co. issued 180,000 shares of 8.625% Non-Cumulative Preferred Stock, Series J.
  • 2The preferred stock was issued via 72,000,000 depositary receipts, each representing 1/400th of a share.
  • 3The issuance was completed on August 21, 2008, under a Form S-3 registration statement.
  • 4The Series J Preferred Stock carries an 8.625% dividend rate and a $10,000 per share liquidation preference.
  • 5Dividend payments on common stock and junior preferred stock are restricted if Series J Preferred dividends are not met.
  • 6A Replacement Capital Covenant was entered into, impacting holders of 5.875% Junior Subordinated Deferrable Interest Debentures, Series O.

Frequently Asked Questions

This 8-K filing announces the completion of the issuance and sale of a new series of preferred stock (8.625% Non-Cumulative Preferred Stock, Series J) by JPMorgan Chase & Co. and related documentation.

The Series J Preferred Stock has an 8.625% non-cumulative dividend rate and a liquidation preference of $10,000 per share. A key feature is that failure to pay dividends on this series restricts the company's ability to pay dividends or make distributions on its common stock and any junior preferred stock.

A Replacement Capital Covenant is an agreement where the issuer agrees not to take certain actions that would be detrimental to holders of specific debt securities, typically related to their ability to be 'redeemed' or replaced with lower-cost capital. In this case, JPM entered into an RCC that impacts holders of its 5.875% Junior Subordinated Deferrable Interest Debentures, Series O.

The preferred stock was sold through depositary receipts. 180,000 shares were deposited, and 72,000,000 depositary receipts were issued, with each receipt representing 1/400th of a share. The sale was made under an underwriting agreement and the company's existing Form S-3 registration statement.