What is the purpose of the Series U Preferred Stock?

The Series U Preferred Stock is a new class of preferred stock designated by Wells Fargo & Company. It was created as a mechanism to raise capital, likely to strengthen its capital base or fund ongoing operations and growth initiatives. The sale of Depositary Shares representing interests in this preferred stock on January 23, 2015, confirms its use as a capital-raising event.

What are the key features of the Series U Preferred Stock?

The Series U Preferred Stock has a dividend rate of 5.875% that is fixed initially and then converts to a floating rate. It is perpetual, meaning it has no maturity date, and it is non-cumulative, meaning any missed dividend payments are not carried forward to be paid at a later date. Each share has a liquidation preference of $25,000.

What are Depositary Shares?

Depositary Shares are a convenient way for investors to trade preferred stock. In this case, each Depositary Share represents a 1/25th interest in a full share of the Series U Preferred Stock. This smaller denomination typically makes the investment more accessible to a wider range of investors than purchasing whole shares with a $25,000 liquidation preference.

What specific events are reported in this 8-K filing?

This 8-K reports two primary events: the official designation of the '5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series U' and the subsequent sale of Depositary Shares representing ownership in this preferred stock. It also serves as a vehicle to file important exhibits related to these events, such as the underwriting and deposit agreements.

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

Summary

Wells Fargo & Company (WFC) filed an 8-K on January 22, 2015, to report the designation and subsequent sale of a new series of preferred stock. Specifically, on January 22, 2015, the company filed a Certificate of Designation with the Delaware Secretary of State, establishing the '5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series U'. This series is authorized for 80,000 shares with a liquidation preference of $25,000 per share. Following this designation, on January 23, 2015, Wells Fargo sold 2,000,000 Depositary Shares, each representing a 1/25th interest in a share of this Series U Preferred Stock. This offering of preferred stock is structured as fixed-to-floating rate and non-cumulative, providing a new capital instrument for the company and potential investment opportunities for shareholders. The filing also includes related underwriting, deposit, and legal opinion exhibits.

Key Highlights

1Designation of '5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series U' (Series U Preferred Stock) on January 22, 2015.
2Authorization of 80,000 shares of Series U Preferred Stock, each with a liquidation preference of $25,000.
3Sale of 2,000,000 Depositary Shares on January 23, 2015, representing interests in the Series U Preferred Stock.
4The Series U Preferred Stock is structured as fixed-to-floating rate and non-cumulative.
5The filing includes exhibits such as the Underwriting Agreement, Certificate of Designation, and Deposit Agreement.
6This action represents a capital raise or debt-like instrument issuance by Wells Fargo.

WELLS FARGO & COMPANY/MN 8-K Report, Bylaw Amendment (Jan 23, 2015)

Summary

Key Highlights

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