Summary
JPMorgan Chase & Co. (JPM) has announced the upcoming liquidation of seven series of trust preferred securities (Trust Preferred Securities) on December 18, 2017. This action will result in the cancellation of these securities and the distribution of underlying junior subordinated debentures (Debentures) directly to the holders of the Trust Preferred Securities and Trust Common Securities. Investors holding the Trust Preferred Securities will receive an equivalent principal amount of the corresponding Debentures in exchange for their existing securities. This move effectively simplifies the capital structure by eliminating intermediate trusts. Holders of the Trust Preferred Securities do not need to take any action, as the exchange will be handled by the relevant trustees through The Depository Trust Company. The next scheduled interest payment will reflect any accrued and unpaid distributions from the Trust Preferred Securities, ensuring investors do not lose entitled income.
Key Highlights
- 1JPMorgan Chase & Co. is liquidating seven series of Trust Preferred Securities on December 18, 2017.
- 2Trust Preferred Securities will be cancelled and replaced with an equivalent principal amount of junior subordinated debentures.
- 3Holders of Trust Preferred Securities will receive the underlying debentures directly.
- 4No action is required from holders of Trust Preferred Securities; the exchange will be processed through The Depository Trust Company.
- 5The underlying debentures are junior subordinated debt of JPMorgan Chase & Co.
- 6The transaction aims to simplify the company's capital structure.
- 7The next interest payment will incorporate any accrued and unpaid distributions from the Trust Preferred Securities.