What are the implications of the Series II Preferred Stock for common stockholders?

If JPMorgan Chase & Co. does not declare dividends on the Series II Preferred Stock for a given dividend period or fails to make liquidation payments, the company's ability to pay dividends on, or make distributions with respect to, its common stock or any parity or junior preferred stock will be restricted. This filing highlights a potential constraint on future common stock dividend payments under specific circumstances.

What is the difference between the 'Shares' and 'Depositary Shares' mentioned?

The 'Shares' refer to the 150,000 shares of the Company's Preferred Stock, Series II. These shares were then deposited with a depositary to create 1,500,000 'Depositary Shares', each representing a one-tenth interest in a share of the Series II Preferred Stock. Investors typically purchase these depositary shares.

Where can I find the detailed terms of the Series II Preferred Stock?

The detailed terms, including rights, preferences, privileges, qualifications, restrictions, and limitations, are fully described in the Certificate of Designations, Powers, Preferences and Rights relating to the Series II Preferred Stock. This document is filed as Exhibit 3.1 to this 8-K and incorporated by reference.

JPM 8-K: Shareholder Matters & Corporate Changes

Q: What is the primary purpose of this 8-K filing?

This 8-K filing announces the completion of JPMorgan Chase & Co.'s offering of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series II, and provides details about the terms and legal structure of this new preferred stock.

Summary

JPMorgan Chase & Co. (JPM) filed an 8-K on February 24, 2020, reporting the completion of an offering of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series II. The company issued 150,000 shares of this preferred stock, which were then deposited to create 1,500,000 depositary shares, each representing a one-tenth interest in a share. These securities were sold under the company's existing registration statement. The issuance of this preferred stock introduces specific dividend and liquidation payment restrictions on JPM's common stock and junior preferred stock if dividends on the Series II Preferred Stock are not declared or paid. The primary investor takeaway from this filing is the company's successful capital raise through preferred stock issuance. Investors should note the terms of the Series II Preferred Stock, particularly the potential impact on common stock dividend payments if the company fails to meet its obligations to Series II Preferred stockholders. This is a standard financial instrument for capital management, and the filing details the legal and structural aspects of this new preferred stock series.

Key Highlights

1JPMorgan Chase & Co. completed the issuance and sale of 150,000 shares of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series II.
2These shares were converted into 1,500,000 depositary shares, with each depositary share representing a 1/10th interest in a share of preferred stock.
3The offering was made under JPMorgan Chase's existing Form S-3 registration statement.
4The Certificate of Designations, establishing the rights and terms of the Series II Preferred Stock, was filed with the Delaware Secretary of State on February 21, 2020.
5The Series II Preferred Stock has a liquidation preference of $10,000 per share.
6Restrictions are imposed on payments related to common stock and junior preferred stock if dividends on the Series II Preferred Stock are not paid.
7The filing includes various exhibits detailing the Certificate of Designations, Deposit Agreement, and legal opinions related to the issuance.

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Feb 24, 2020)

Summary

Key Highlights

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