What are "Principal at Risk Securities"?

Principal at Risk Securities are a type of structured note where the investor's return of principal at maturity is not guaranteed. The principal amount the investor receives back can be reduced, or even lost entirely, based on the performance of an underlying asset, index, or benchmark. In this case, the performance of specific stock market indices and ETFs will determine the repayment of principal.

What are the underlying assets for these new Wells Fargo notes?

The underlying assets vary by note issuance. They include the SPDR® S&P 500® ETF Trust, the S&P 500® Index, the Russell 2000® Index, the EURO STOXX 50® Index, and the Financial Select Sector SPDR® Fund.

Why is Wells Fargo issuing these types of notes?

Companies like Wells Fargo issue structured notes, such as these Principal at Risk Securities, as a way to offer potentially higher yields or unique investment profiles compared to traditional debt. They can also be a tool for the issuer to manage their own funding costs or hedge other exposures. This filing indicates they are part of a larger registration strategy for medium-term debt issuance.

What is the significance of the "Series K" designation?

The "Series K" designation typically refers to a specific series within a larger, established medium-term note program. It allows Wells Fargo to categorize and manage different issuances of debt with varying terms, structures, and maturities under a common framework. Investors should look at the specific terms of each Series K note, not just the series designation, to understand its characteristics.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

This Wells Fargo & Company (WFC) 8-K filing from March 7, 2017, primarily serves to disclose the issuance of various Medium-Term Notes, Series K. These notes are structured as "Principal at Risk Securities," meaning investors' principal is subject to loss based on the performance of underlying indices or ETFs, such as the S&P 500®, Russell 2000®, EURO STOXX 50®, and the Financial Select Sector SPDR® Fund. The filing includes the forms of these notes and a legal opinion from Faegre Baker Daniels LLP regarding their issuance.

Key Highlights

1Wells Fargo issued new "Medium-Term Notes, Series K" on or around March 6-7, 2017.
2These are "Principal at Risk Securities," indicating potential loss of invested principal.
3The performance of these notes is linked to various indices and ETFs, including the S&P 500®, Russell 2000®, EURO STOXX 50®, and the Financial Select Sector SPDR® Fund.
4Maturity dates for these notes range from March 2019 to March 2022.
5The filing includes the specific forms for each of the five different note issuances.
6A legal opinion from Faegre Baker Daniels LLP concerning the notes is also filed as part of this report.
7This filing is in support of a Registration Statement on Form S-3 previously filed by Wells Fargo.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Mar 7, 2017)

Summary

Key Highlights

Frequently Asked Questions