Summary
JPMorgan Chase & Co. (JPM) filed an 8-K on July 31, 2019, reporting the issuance of new preferred stock. Specifically, the company issued 225,000 shares of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series FF, with a liquidation preference of $10,000 per share. These shares were deposited into a trust and evidenced by 2,250,000 depositary shares, each representing a one-tenth interest. This issuance signifies a capital raise for the company, likely to strengthen its balance sheet or fund ongoing operations. Investors should note the 'non-cumulative' nature of the dividends, meaning missed dividend payments are not recouped. Additionally, the terms of this preferred stock impose restrictions on future dividend payments or redemptions of common or junior preferred stock if dividends on the Series FF Preferred Stock are not paid. The full details of these rights and restrictions are outlined in the Certificate of Designations.
Key Highlights
- 1Issuance of 225,000 shares of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series FF.
- 2Each preferred share has a liquidation preference of $10,000.
- 3The preferred stock is evidenced by 2,250,000 depositary shares, each representing a 1/10th interest.
- 4The Certificate of Designations, filed on July 30, 2019, establishes the terms and rights of the Series FF Preferred Stock.
- 5Dividend payments on common stock or junior preferred stock are restricted if dividends on Series FF Preferred Stock are not paid.
- 6The issuance was completed on July 31, 2019, following an Underwriting Agreement.
- 7The offering was made under JPMorgan Chase's Registration Statement on Form S-3.