What are "Principal at Risk Securities"?

Principal at Risk Securities are investment products where the amount of principal returned at maturity is not guaranteed and may be less than the initial investment. The repayment of principal is contingent on the performance of an underlying asset or index, in this case, specific energy sector ETFs. If the underlying asset performs poorly, investors may lose a portion or all of their principal.

What is the risk associated with these specific notes?

The primary risk is that the principal repayment at maturity is linked to the performance of the *lowest* performing of the two energy ETFs. If both ETFs decline in value, or if one significantly underperforms the other, investors could face a reduction in their principal investment. The specific terms and payoff structure within the note document would detail the exact level of risk and potential returns.

Why is Wells Fargo issuing these types of notes?

Issuing structured products like these notes allows Wells Fargo to offer investment products that may appeal to investors seeking specific market exposures or potential yield enhancements, while also managing their own funding needs and diversifying their product offerings. These types of securities are often designed to meet particular investor demands related to specific market sectors.

Where can I find the detailed terms and conditions of these notes?

The detailed terms and conditions, including the specific calculation methodology for principal repayment, risk factors, and investment objectives, would be found within the "Form of Medium-Term Notes, Series K" document, which is filed as an exhibit with this 8-K. Investors should also consult the prospectus supplement and the base prospectus related to the Registration Statement on Form S-3 for comprehensive information.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

This Wells Fargo & Company (WFC) 8-K filing from December 19, 2017, primarily serves to disclose the details and related legal documentation for a new issuance of Medium-Term Notes, Series K. These notes are structured as "Principal at Risk Securities" and are linked to the performance of specific energy sector exchange-traded funds (ETFs). The specific ETFs are the Energy Select Sector SPDR® Fund and the SPDR® S&P® Oil & Gas Exploration & Production ETF, with a maturity date of December 17, 2021. For investors, this filing indicates Wells Fargo's continued engagement in structured product offerings. The "Principal at Risk" nature of these notes means that the principal amount repaid at maturity is dependent on the performance of the underlying energy ETFs, potentially exposing investors to losses if the performance is unfavorable. Investors considering these notes should carefully review the terms and risks associated with this specific type of structured debt instrument.

Key Highlights

1Wells Fargo issued new "Medium-Term Notes, Series K" on December 18, 2017.
2These notes are classified as "Principal at Risk Securities", indicating potential loss of principal.
3The performance of the notes is directly linked to the lowest performing of two energy sector ETFs.
4The underlying ETFs are the Energy Select Sector SPDR® Fund and the SPDR® S&P® Oil & Gas Exploration & Production ETF.
5The maturity date for these notes is December 17, 2021.
6The filing includes the form of the note and a legal opinion from Faegre Baker Daniels LLP.
7This filing is associated with a Registration Statement on Form S-3.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Dec 19, 2017)

Summary

Key Highlights

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