01—Abstract
Summary
Summary of the 8-K filed February 4, 2025. Cited figures are marked; the original filing is the authoritative source.
JPMorgan Chase & Co. (JPM) has filed an 8-K report detailing the issuance of new preferred stock.
Specifically, the company issued 300,000 shares of its 6.500%a Fixed-Rate Reset Non-Cumulative Preferred Stock, Series OO. These shares are represented by 3,000,000 depositary shares, with each depositary share representing a one-tenth interest in a preferred share. This issuance was completed on February 4, 2025, and was made under the company's effective Registration Statement on Form S-3.
The Series OO Preferred Stock carries a liquidation preference of $10,000b per share and has a fixed-rate reset feature. Importantly, the terms of this preferred stock include restrictions on the company's ability to pay dividends on or redeem junior securities if dividends on the Series OO Preferred Stock are not paid. Investors should note that these are non-cumulative preferred shares, meaning any missed dividends are not carried forward.
02—Key points
Key Highlights
- JPM has issued 300,000 shares of 6.500% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series OO.
- The preferred stock is represented by 3,000,000 depositary shares, each representing a 1/10th interest.
- The issuance, effective February 4, 2025, was conducted under a filed registration statement (Form S-3).
- The Series OO Preferred Stock has a liquidation preference of $10,000 per share.
- Dividends on this preferred stock are non-cumulative, meaning missed payments are not accumulated.
- Restrictions will be imposed on payments related to common stock and junior preferred stock if Series OO dividends are not paid.
- The filing includes exhibits detailing the Certificate of Designations, Deposit Agreement, and legal opinions.
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 issuance and sale of a new series of preferred stock, specifically the 6.500% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series OO, and its associated depositary shares.
What are the key terms of the Series OO Preferred Stock?
The Series OO Preferred Stock has a fixed dividend rate of 6.500% that can be reset, a liquidation preference of $10,000 per share, and its dividends are non-cumulative. Its issuance is also subject to certain restrictions on JPM's ability to pay dividends on or redeem junior securities if Series OO dividends are not declared or paid.
How does the non-cumulative nature of the dividends affect investors?
The non-cumulative nature means that if JPM decides not to pay a dividend on the Series OO Preferred Stock for a particular dividend period, that missed dividend is forfeited and will not be paid later. This contrasts with cumulative preferred stock, where missed dividends accrue and must be paid before dividends on junior stock.
What is the significance of the depositary shares?
The depositary shares are a mechanism to make the preferred stock more accessible to a wider range of investors. Each depositary share represents a fraction (one-tenth in this case) of a full share of the Series OO Preferred Stock, potentially lowering the per-unit investment cost.
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