Summary
JPMorgan Chase & Co. filed an 8-K on April 23, 2013, to report on the issuance and sale of a new series of preferred stock. The company issued 150,000 shares of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series Q, with a liquidation preference of $10,000 per share. These shares were converted into 1,500,000 depositary shares, each representing one-tenth of a preferred share, through depositary receipts issued by Computershare Shareowner Services LLC. The issuance of this Series Q Preferred Stock introduces specific restrictions on the company's ability to pay dividends or make distributions on its common stock or other junior preferred stock if dividends on the Series Q Preferred Stock are not declared or paid. This filing is important for investors to understand potential impacts on common equity distributions and the capital structure of the company. The terms and rights associated with this new preferred stock series are detailed in the filed Certificate of Designations and Deposit Agreement.
Key Highlights
- 1JPMorgan Chase & Co. issued 150,000 shares of Series Q Fixed-to-Floating Rate Non-Cumulative Preferred Stock, with each share having a $10,000 liquidation preference.
- 2These preferred shares were issued as 1,500,000 depositary shares, evidenced by depositary receipts, with each depositary share representing one-tenth of a preferred share.
- 3The filing formally establishes the rights, preferences, and limitations of the Series Q Preferred Stock through a Certificate of Designations filed with the Delaware Secretary of State.
- 4A key feature of the Series Q Preferred Stock is that failure to declare dividends on this series will impose restrictions on the company's ability to pay dividends or make distributions on its common stock and other parity or junior preferred stock.
- 5The issuance was completed on April 23, 2013, pursuant to an Underwriting Agreement and a previously filed Registration Statement on Form S-3.
- 6The company has filed the Certificate of Designations, Deposit Agreement, and related legal opinions as exhibits to this 8-K report.
- 7This action represents a modification to the rights of security holders by introducing a new class of preferred equity with specific terms and potential implications for common stockholders.