What are 'Principal at Risk Securities'?

Principal at Risk Securities are a type of structured product where the return to the investor is linked to the performance of an underlying asset or index. However, unlike traditional fixed-income securities, the investor may lose a portion or all of their principal investment if the performance of the linked asset(s) does not meet certain predefined conditions.

What does it mean for the notes to be 'linked to the lowest performing' index?

This means that the payout or return on the investment, and potentially the preservation of principal, depends on the performance of the worst-performing index among the S&P 500®, Russell 2000®, and EURO STOXX 50®. If one of these indices performs poorly, it could negatively impact the investor's return or principal, even if the other indices perform well.

Why is Wells Fargo issuing these types of notes?

Financial institutions like Wells Fargo issue structured notes to diversify their funding sources and to offer investors products with potentially different risk/return profiles than traditional investments. These notes allow the company to tap into investor demand for products linked to market performance while managing their own balance sheet and risk.

Where can I find the specific terms and risks of these notes?

The specific terms, conditions, and risks associated with these notes can be found in the 'Form of Medium-Term Notes, Series K' (Exhibits 4.1 and 4.2) and the 'Opinion of Faegre Baker Daniels LLP' (Exhibit 5.1) filed as part of this 8-K report.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

Wells Fargo & Company filed an 8-K on October 31, 2017, to report the issuance of two series of Medium-Term Notes, Series K. These notes are structured as "Principal at Risk Securities" and are linked to the performance of the S&P 500® Index, the Russell 2000® Index, and the EURO STOXX 50® Index. Specifically, the securities are tied to the lowest performing of these three indices. The primary purpose of this filing is to provide investors with the official documentation for these notes, including the form of the notes themselves and the legal opinion from Faegre Baker Daniels LLP. These filings ensure transparency and regulatory compliance regarding the terms and structure of these debt instruments.

Key Highlights

1Wells Fargo issued new Medium-Term Notes, Series K, as "Principal at Risk Securities".
2The performance of these notes is linked to the lowest performing of the S&P 500®, Russell 2000®, and EURO STOXX 50® Indices.
3Two distinct note series were issued with maturity dates of October 29, 2027, and October 31, 2024.
4The filing provides the official forms of these notes for investor review.
5A legal opinion from Faegre Baker Daniels LLP regarding the notes is included in the filing.
6This 8-K filing is for informational and regulatory purposes concerning the new debt issuances.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Oct 31, 2017)

Summary

Key Highlights

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