What is the significance of the 6.70% Non-Cumulative Preferred Stock, Series T issuance?

The issuance of the 6.70% Non-Cumulative Preferred Stock, Series T, represents a new series of preferred equity added to JPMorgan Chase's capital structure. It provides a fixed dividend rate of 6.70% and has specific rights and restrictions, including potential limitations on common stock dividend payments if Series T dividends are not met. This is a way for the company to raise capital with specific terms.

What does 'non-cumulative' mean for this preferred stock?

'Non-cumulative' means that if JPMorgan Chase misses a dividend payment on the Series T Preferred Stock for a specific period, that missed dividend is not carried forward. The company is not obligated to pay it in the future. This is an important distinction compared to cumulative preferred stock.

How does this preferred stock issuance affect common stockholders?

The Series T Preferred Stock includes provisions that can restrict the company's ability to pay dividends or make distributions on its common stock if it fails to pay dividends on the Series T Preferred Stock for the relevant dividend period. This prioritizes the preferred stockholders' dividend rights over common stockholders' in certain scenarios.

What is the role of the depositary shares and depositary receipts?

The Series T Preferred Stock was issued in the form of depositary receipts representing depositary shares. Each depositary share represents a fraction (1/400th) of one share of Series T Preferred Stock. This structure is common for preferred stock offerings, allowing for smaller, more divisible units of ownership to be traded on the market and potentially increasing liquidity.

JPM 8-K: Shareholder Matters & Corporate Changes

Summary

JPMorgan Chase & Co. (JPM) filed an 8-K on January 30, 2014, to report the issuance of 85,000 shares of its 6.70% Non-Cumulative Preferred Stock, Series T. This preferred stock, with a liquidation preference of $10,000 per share, was issued through depositary receipts representing 34,000,000 depositary shares, each representing 1/400th of a preferred share. The filing details the establishment of the terms and rights associated with this new series of preferred stock through a Certificate of Designations, which was filed with the Delaware Secretary of State on January 29, 2014. This issuance represents a material modification to the rights of security holders by introducing a new class of preferred stock. The terms of the Series T Preferred Stock include a dividend rate of 6.70% and impose restrictions on the payment of dividends or distributions to common stockholders or junior preferred stock if dividends on the Series T Preferred Stock are not paid. Investors should note that this is non-cumulative preferred stock, meaning missed dividend payments are not carried forward.

Key Highlights

1JPMorgan Chase & Co. issued 85,000 shares of 6.70% Non-Cumulative Preferred Stock, Series T.
2The preferred stock has a liquidation preference of $10,000 per share.
3The issuance was made via 34,000,000 depositary shares, with each depositary share representing 1/400th of a Series T preferred share.
4The Certificate of Designations establishing the rights and terms of the Series T Preferred Stock was filed on January 29, 2014.
5The terms include dividend payment restrictions on common stock and junior preferred stock if Series T dividends are not paid.
6The offering was conducted under a Registration Statement on Form S-3 and an Underwriting Agreement dated January 23, 2014.
7The filing establishes a new class of preferred equity for the company, impacting the capital structure.

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Jan 30, 2014)

Summary

Key Highlights

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