What are Principal at Risk Securities?

Principal at Risk Securities are investment products where the return of the principal amount invested is not guaranteed. Their performance is typically linked to an underlying asset or index, and if that underlying asset performs poorly, investors may lose a portion or all of their initial investment.

What is the investment objective of these Notes?

While the specific investment objective is not detailed in this 8-K, these notes are designed to offer investors exposure to the performance of major stock market indices. However, due to the 'Principal at Risk' nature, they are suitable for investors who are willing to accept the possibility of losing principal in exchange for potentially higher returns if the linked indices perform favorably, or in this case, if the lowest performing index does not experience significant declines.

Why is Wells Fargo issuing these types of Notes?

Issuing structured products like these Medium-Term Notes allows Wells Fargo to cater to a diverse range of investor needs and risk appetites. It also provides a way for the company to generate fees and engage in capital markets activities by offering sophisticated investment solutions.

Where can I find more details about the specific terms and risks of these Notes?

More detailed information about the specific terms, conditions, risk factors, and payout structures of these Notes can be found in the form of the Note itself (Exhibit 4.1) and the accompanying legal opinions (Exhibit 5.1) filed with this 8-K. Investors should carefully review these documents before considering any investment.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

This 8-K filing from Wells Fargo & Company (WFC) on August 30, 2018, primarily serves to disclose the issuance of new Medium-Term Notes, Series S. These notes are structured as "Principal at Risk Securities" and their performance is directly linked to the lowest performing of three major U.S. stock market indices: the S&P 500® Index, the Russell 2000® Index, and the Dow Jones Industrial Average®. The notes have a maturity date of August 31, 2023. For investors, this filing indicates Wells Fargo's ongoing activity in the structured products market, offering investment vehicles with exposure to equity market performance but with a principal-at-risk component. The inclusion of the form of the note and legal opinions from Faegre Baker Daniels LLP provides transparency regarding the terms and legal standing of this particular debt issuance.

Key Highlights

1Wells Fargo & Company issued new Medium-Term Notes, Series S on August 29, 2018.
2These notes are classified as Principal at Risk Securities, meaning investors could lose principal.
3The performance of the notes is tied to the lowest performing of the S&P 500®, Russell 2000®, and Dow Jones Industrial Average® indices.
4The maturity date for these notes is August 31, 2023.
5The filing includes the form of the Note as an exhibit.
6Legal opinions from Faegre Baker Daniels LLP regarding the Notes are also filed.
7The filing is related to a Registration Statement on Form S-3.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Aug 30, 2018)

Summary

Key Highlights

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