01—Abstract
Summary
Summary of the 8-K filed March 12, 2024. Cited figures are marked; the original filing is the authoritative source.
JPMorgan Chase & Co. (JPM) filed an 8-K report on March 11-12, 2024, disclosing the issuance of a new series of preferred stock: 6.875%a Fixed-Rate Reset Non-Cumulative Preferred Stock, Series NN.
This issuance involves 250,000 shares of preferred stock, represented by 2,500,000 depositary shares. This action is primarily a capital-raising event and establishes a new class of preferred equity with specific dividend rights and liquidation preferences.
Investors should note that the terms of this Series NN Preferred Stock include restrictions on the Company's ability to pay dividends or make distributions on its common stock or junior preferred stock if dividends on the Series NN Preferred Stock are not declared or paid. This filing details the establishment of these rights and preferences through a Certificate of Designations and associated depositary agreements, offering transparency into the structure and terms of this new capital instrument.
02—Key points
Key Highlights
- JPM has issued 250,000 shares of 6.875% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series NN.
- These shares are represented by 2,500,000 depositary shares, each representing a 1/10th interest in a preferred share.
- The Series NN Preferred Stock carries a fixed-rate reset coupon of 6.875% and is non-cumulative.
- The liquidation preference for each preferred share is $10,000.
- The filing establishes specific rights, preferences, and restrictions for the Series NN Preferred Stock through a Certificate of Designations.
- Dividend payments on JPM's common stock or junior preferred stock may be restricted if dividends on the Series NN Preferred Stock are not declared or paid.
- The issuance was made pursuant to an Underwriting Agreement and a previously filed Registration Statement on Form S-3.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing?
The primary purpose of this 8-K filing is to report the establishment and issuance of a new series of preferred stock by JPMorgan Chase & Co., specifically the 6.875% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series NN. This is a disclosure of a material event related to the company's capital structure.
What are the key financial terms of the Series NN Preferred Stock?
The Series NN Preferred Stock has a fixed-rate reset coupon of 6.875%, is non-cumulative, and has a liquidation preference of $10,000 per share. The 'Fixed-Rate Reset' feature implies that the dividend rate will be reset periodically at a specified spread over a benchmark interest rate.
How does this new preferred stock affect JPM's common stock or junior preferred stock?
The terms of the Series NN Preferred Stock include dividend payment restrictions. If JPM fails to declare dividends on the Series NN Preferred Stock for a given dividend period or fails to pay the liquidation preference (plus any accrued dividends) in case of liquidation, the company will be restricted from paying dividends, making distributions, or redeeming, purchasing, or acquiring its common stock or any preferred stock that ranks junior to or on parity with the Series NN Preferred Stock.
Where can I find more detailed information about the Series NN Preferred Stock?
More detailed information can be found in the Certificate of Designations, Powers, Preferences and Rights of JPMorgan Chase & Co., establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the 6.875% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series NN, which is filed as Exhibit 3.1 to this Current Report on Form 8-K. The Deposit Agreement and form of Depositary Receipt (Exhibits 4.2 and 4.3) also contain relevant details.
04—Continue