What is the purpose of the new Series T Preferred Stock?

The Series T Preferred Stock, along with its associated Depositary Shares, was issued as a means for Wells Fargo to raise capital. This is a common strategy for financial institutions to strengthen their balance sheet and fund operations.

What is a Depositary Share and how does it relate to the Series T Preferred Stock?

A Depositary Share is a form of ownership that represents an interest in shares of a foreign or preferred stock. In this case, each Depositary Share represents a small fraction (1/1,000th) of a share of Wells Fargo's Series T Preferred Stock. This structure can make the preferred stock more accessible to a wider range of investors.

What are the key financial terms of the Series T Preferred Stock?

The Series T Preferred Stock carries a liquidation preference of $25,000 per share. The 'Non-Cumulative Perpetual' designation indicates that dividends, if declared, are not guaranteed to be paid if the company misses a payment (non-cumulative) and that the stock has no maturity date (perpetual).

Does this issuance affect existing common shareholders?

The issuance of preferred stock generally ranks senior to common stock in terms of dividend payments and liquidation preference. While it can dilute earnings per share for common shareholders over time, it can also provide stability and capital for the company, potentially benefiting common shareholders in the long run by supporting the company's financial health.

WELLS FARGO & COMPANY/MN 8-K: Corporate Changes

Summary

Wells Fargo & Company (WFC) filed an 8-K on July 21, 2014, reporting significant corporate actions related to its preferred stock. The primary event was the filing of a Certificate of Designation on July 18, 2014, establishing a new series of preferred stock: Non-Cumulative Perpetual Class A Preferred Stock, Series T. This series has a substantial liquidation preference of $25,000 per share, with 32,200 authorized shares. Further details reveal that on July 21, 2014, Wells Fargo sold 32,000,000 Depositary Shares. Each Depositary Share represents a 1/1,000th interest in a share of the newly created Series T Preferred Stock. This transaction, along with associated agreements and legal opinions, was filed in connection with a previously filed Registration Statement on Form S-3. This move indicates Wells Fargo's strategy to raise capital through the issuance of preferred equity.

Key Highlights

1Wells Fargo established a new series of preferred stock, "Non-Cumulative Perpetual Class A Preferred Stock, Series T".
2The Series T Preferred Stock has a liquidation preference of $25,000 per share.
3The company authorized 32,200 shares of this new preferred stock.
4Wells Fargo sold 32,000,000 Depositary Shares on July 21, 2014.
5Each Depositary Share represents a 1/1,000th interest in a share of the Series T Preferred Stock.
6The issuance is part of a broader capital raising effort, supported by a Registration Statement on Form S-3.

WELLS FARGO & COMPANY/MN 8-K Report, Bylaw Amendment (Jul 21, 2014)

Summary

Key Highlights

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