Summary
JPMorgan Chase & Co. (JPM) filed an 8-K on September 23, 2014, to report the establishment and issuance of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series X. This new series of preferred stock has a liquidation preference of $10,000 per share and was issued in the form of 1,600,000 depositary shares, each representing one-tenth of a share of Series X Preferred Stock. The filing details the rights, preferences, and restrictions associated with this new class of stock, including dividend and liquidation payment provisions. Key for investors is the structure of the Series X Preferred Stock and its potential impact on common stockholders. The terms indicate that any failure by JPM to pay dividends on the Series X Preferred Stock or meet its liquidation preference would impose restrictions on the company's ability to pay dividends or make distributions on its common stock or other junior preferred stock. This filing represents a capital raising activity and the creation of a new class of equity with specific rights and limitations.
Key Highlights
- 1JPM announced the issuance of 160,000 shares of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series X.
- 2The Series X Preferred Stock has a liquidation preference of $10,000 per share.
- 3The shares were issued as 1,600,000 depositary shares, each representing 1/10th of a Series X Preferred Stock share.
- 4A Certificate of Designations was filed with the Delaware Secretary of State on September 22, 2014, establishing the terms of the Series X Preferred Stock.
- 5Dividends on the Series X Preferred Stock are non-cumulative.
- 6Restrictions are imposed on payments to common stockholders or junior preferred stock if JPM fails to pay dividends or liquidation preferences on the Series X Preferred Stock.
- 7The issuance was made under JPM's Registration Statement on Form S-3 and an Underwriting Agreement.