What is the primary purpose of issuing the Series JJ Preferred Stock?

The primary purpose of issuing the Series JJ Preferred Stock is to raise capital for JPMorgan Chase & Co. This type of issuance adds to the company's capital base, which can be used for various corporate purposes, including supporting business growth, meeting regulatory capital requirements, or general corporate operations.

What are the implications of 'non-cumulative' for the preferred stock dividends?

The term 'non-cumulative' means that if JPM misses a dividend payment on the Series JJ Preferred Stock, that missed dividend is forfeited and does not accumulate. The company is not obligated to pay any missed dividends in the future. Dividends must be declared by the company's board of directors in order to be paid.

How does this preferred stock issuance affect common stockholders?

The issuance of preferred stock means that these preferred shareholders have a claim on the company's earnings and assets that is senior to common stockholders. The filing explicitly states that if dividends on the Series JJ Preferred Stock are not paid, JPM's ability to pay dividends on its common stock will be restricted. This prioritizes payments to preferred shareholders over common shareholders in certain circumstances.

What is the liquidation preference of this preferred stock?

The Series JJ Preferred Stock has a liquidation preference of $10,000 per share. This means that in the event of liquidation, dissolution, or winding up of the company, holders of this preferred stock are entitled to receive $10,000 per share, plus any declared and unpaid dividends, before any distribution is made to common stockholders.

JPM 8-K: Shareholder Matters & Corporate Changes

Summary

JPMorgan Chase & Co. (JPM) has filed an 8-K report detailing the issuance of its 4.55% Non-Cumulative Preferred Stock, Series JJ. This series of preferred stock represents a liquidation preference of $10,000 per share and is issued via depositary shares, with each depositary share representing a 1/400th interest. The company issued 150,000 preferred shares, translating to 60,000,000 depositary shares, on March 17, 2021, under an existing registration statement. This issuance provides an additional layer of capital for the company. The primary impact for investors is the establishment of a new class of preferred stock with specific dividend and liquidation rights. Crucially, the terms of this Series JJ Preferred Stock impose restrictions on the payment of dividends or distributions on JPM's common stock or any junior preferred stock if dividends on the Series JJ Preferred Stock are not declared or paid. This emphasizes the priority of the preferred shareholders in receiving their stated dividends.

Key Highlights

1JPM issued 150,000 shares of 4.55% Non-Cumulative Preferred Stock, Series JJ.
2The preferred stock has a liquidation preference of $10,000 per share.
3The issuance was conducted via 60,000,000 depositary shares, each representing a 1/400th interest in a preferred share.
4The Series JJ Preferred Stock is non-cumulative, meaning missed dividends are not carried forward.
5Restrictions are placed on the payment of dividends and distributions on common stock and junior preferred stock if dividends on Series JJ Preferred Stock are not paid.
6The issuance was completed on March 17, 2021, under an Underwriting Agreement and a Form S-3 registration statement.
7The filing includes the Certificate of Designations, establishing the rights and terms of the new preferred stock.

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Mar 17, 2021)

Summary

Key Highlights

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