What are "Principal at Risk Securities"?

Principal at Risk Securities are investment products where the return of the principal investment at maturity is not guaranteed and is subject to the performance of an underlying asset or index. In this case, the principal is at risk based on the performance of the specified stock market indices.

What is the purpose of issuing these types of notes?

Companies like Wells Fargo issue these types of notes to raise capital and offer investors specific investment strategies tied to market performance. The "Principal at Risk" structure can attract investors seeking potential higher returns tied to market movements while managing risk according to the note's specific terms.

What specific market indices are these notes linked to?

The notes are linked to either the S&P 500® Index or the lowest performing among the S&P 500® Index, the Russell 2000® Index, and the Dow Jones Industrial Average®.

Where can I find the details of these notes?

The forms of the notes, along with the legal opinion from Faegre Baker Daniels LLP, are filed as exhibits with this 8-K report and are publicly available through the SEC's EDGAR database.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

Wells Fargo & Company/MN (WFC) filed an 8-K on June 20, 2018, to report the issuance of new Medium-Term Notes, Series S. These notes are structured as "Principal at Risk Securities" and are linked to the performance of equity market indices. Specifically, two types of notes were issued: one tied to the S&P 500® Index and another linked to the lowest performing of the S&P 500® Index, the Russell 2000® Index, and the Dow Jones Industrial Average®. These notes have a maturity date of June 20, 2023. The filing includes the forms of these specific notes and the legal opinion from Faegre Baker Daniels LLP regarding their issuance, along with the firm's consent. For investors, this filing signals the company's ongoing activity in debt issuance and its engagement with structured financial products tied to market performance.

Key Highlights

1Wells Fargo issued new Medium-Term Notes, Series S, on June 19, 2018.
2The notes are classified as "Principal at Risk Securities", meaning principal may be lost based on performance.
3Two distinct note types were issued, linked to different equity index strategies.
4One note is linked to the S&P 500® Index.
5The second note is linked to the worst-performing of the S&P 500® Index, Russell 2000® Index, and Dow Jones Industrial Average®.
6The maturity date for these notes is June 20, 2023.
7The filing includes the official forms of the notes and a legal opinion from Faegre Baker Daniels LLP.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Jun 20, 2018)

Summary

Key Highlights

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