8-KShareholder MattersCorporate ChangesOther Events+1

JPMORGAN CHASE & CO 8-K Report, Rights Modification (Jul 29, 2021)

Filed July 29, 2021For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) filed an 8-K on July 29, 2021, to report on the issuance of new preferred stock. Specifically, the company issued 200,000 shares of its 4.20% Non-Cumulative Preferred Stock, Series MM. These shares were deposited against the delivery of 80,000,000 depositary shares, each representing a 1/400th interest in a share of the preferred stock. This issuance was made under a previously effective registration statement. The Series MM Preferred Stock carries a liquidation preference of $10,000 per share and a fixed dividend rate of 4.20%. A key provision for investors to note is that the company's ability to pay dividends or make distributions on its common stock or other junior/parity preferred stock is restricted if it fails to declare dividends on the Series MM Preferred Stock or make the required liquidation payment. The filing includes various exhibits detailing the terms and legal opinions related to this preferred stock issuance and its associated depositary shares.

Key Highlights

  • 1JPM completed the issuance of 200,000 shares of 4.20% Non-Cumulative Preferred Stock, Series MM.
  • 2The preferred stock has a liquidation preference of $10,000 per share.
  • 380,000,000 depositary shares were issued, each representing a 1/400th interest in a share of Series MM Preferred Stock.
  • 4Dividends on the Series MM Preferred Stock are non-cumulative.
  • 5Restrictions on common stock and junior/parity preferred stock dividend payments apply if Series MM dividends are not declared or paid.
  • 6The issuance was conducted under the company's effective Registration Statement on Form S-3.
  • 7The filing includes detailed exhibits on the Certificate of Designations, Deposit Agreement, and legal opinions.

Frequently Asked Questions

The primary purpose of this 8-K filing is to officially report the completion of the issuance and sale of JPMorgan Chase & Co.'s 4.20% Non-Cumulative Preferred Stock, Series MM, and its associated depositary shares.

The Series MM Preferred Stock has a fixed dividend rate of 4.20% per annum, a liquidation preference of $10,000 per share, and its dividends are non-cumulative. This means if a dividend payment is missed, it is not carried forward to be paid later.

The terms of the Series MM Preferred Stock include restrictions on the company's ability to pay dividends on its common stock or other preferred stock that ranks equally or junior to the Series MM Preferred Stock if JPM fails to declare or pay dividends on the Series MM Preferred Stock itself. This prioritizes the preferred stockholders' dividends over common stock dividends.

JPMorgan Chase deposited 200,000 shares of Series MM Preferred Stock with a depositary. In return, 80,000,000 depositary shares were issued, with each depositary share representing a 1/400th interest in one share of the Series MM Preferred Stock. This structure allows for smaller denominations for trading and broader accessibility.