8-KShareholder MattersCorporate ChangesOther Events+1

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Feb 5, 2013)

Filed February 5, 2013For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) filed an 8-K on February 5, 2013, to report the completion of an offering and sale of 5.45% Non-Cumulative Preferred Stock, Series P. This issuance involved 90,000 shares, represented by 36,000,000 depositary shares, with each depositary share representing 1/400th of a preferred stock share. The preferred stock carries a liquidation preference of $10,000 per share. This filing establishes the formal terms and conditions of this new preferred stock series, including 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 P Preferred Stock are not declared or paid. Investors should note that the underwriters have an option to purchase an additional 3,100,000 depositary shares, indicating potential for further capital raising. The filing details the establishment of the Certificate of Designations with the Delaware Secretary of State, which legally defines the rights and preferences of this new security. This action is part of JPM's ongoing capital management strategy, and the terms of the preferred stock are crucial for understanding its place in the company's capital structure and potential impact on common shareholders.

Key Highlights

  • 1Completion of issuance and sale of 5.45% Non-Cumulative Preferred Stock, Series P.
  • 290,000 preferred shares issued, representing 36,000,000 depositary shares.
  • 3Each depositary share represents 1/400th of a Series P Preferred Stock share.
  • 4Series P Preferred Stock has a liquidation preference of $10,000 per share.
  • 5Underwriters have an option to purchase up to an additional 3,100,000 depositary shares.
  • 6Filing establishes the Certificate of Designations, outlining rights and preferences of the new preferred stock.
  • 7Dividends on common stock and junior preferred stock are restricted if Series P dividends are not paid.

Frequently Asked Questions

JPMorgan Chase & Co. issued 5.45% Non-Cumulative Preferred Stock, Series P. This issuance was conducted through depositary shares, with each depositary share representing a fraction of a preferred stock share.

The Series P Preferred Stock has a dividend rate of 5.45% and a liquidation preference of $10,000 per share. It is non-cumulative, meaning that if a dividend payment is missed in a particular period, it is not carried forward to be paid in the future.

The terms of the Series P Preferred Stock include a restriction that limits JPM's ability to pay dividends or make distributions on its common stock or any junior preferred stock if it fails to declare or pay dividends on the Series P Preferred Stock. This prioritizes payments to preferred shareholders over common shareholders in certain scenarios.

Yes, the underwriters have an option to purchase up to an additional 3,100,000 depositary shares within 30 days of January 29, 2013. This indicates that JPM may raise additional capital through this preferred stock offering.