Summary
JPMorgan Chase & Co. (JPM) filed an 8-K report on May 20, 2021, detailing the issuance of its 4.625% Non-Cumulative Preferred Stock, Series LL. The company issued 185,000 shares of this preferred stock, which translates to 74,000,000 depositary shares, each representing a 1/400th interest. This issuance effectively modifies the rights of security holders by introducing a new class of preferred stock with specific dividend and liquidation preferences.
Key Highlights
- 1JPMorgan Chase & Co. issued 185,000 shares of 4.625% Non-Cumulative Preferred Stock, Series LL.
- 2The preferred stock issuance resulted in 74,000,000 depositary shares being made available, each representing a 1/400th interest.
- 3The Series LL Preferred Stock carries a liquidation preference of $10,000 per share.
- 4Dividends on the Series LL Preferred Stock are stated to be 4.625% and are non-cumulative.
- 5Restrictions on future dividend payments or capital distributions to common stock or junior preferred stock holders may apply if dividends on the Series LL Preferred Stock are not declared.
- 6The issuance was conducted under the company's existing Registration Statement on Form S-3.
- 7The filing includes various exhibits detailing the terms of the preferred stock and depositary shares, including the Certificate of Designations and Deposit Agreement.
Frequently Asked Questions
The primary purpose of this 8-K filing is to report a material modification to the rights of JPM's security holders through the issuance of a new class of preferred stock, the 4.625% Non-Cumulative Preferred Stock, Series LL.
The Series LL Preferred Stock has a stated dividend rate of 4.625% per annum, which is non-cumulative. It also has a liquidation preference of $10,000 per share.
The issuance introduces a new class of stock with preferential rights. Specifically, the terms state that JPM's ability to pay dividends on, or make distributions with respect to, its common stock or any junior preferred stock may be restricted if dividends on the Series LL Preferred Stock are not declared for the most recently completed dividend period.
Depositary shares are a convenient way for investors to hold an interest in preferred stock. In this case, 400 depositary shares represent one share of the Series LL Preferred Stock, facilitating trading and ownership of fractional interests in the preferred stock.