What are "Principal at Risk Securities"?

Principal at Risk Securities are structured financial products where the return of the investor's principal investment at maturity is not guaranteed and is dependent on the performance of an underlying asset or index. In this case, the repayment of principal is linked to the S&P 500® Index or the Russell 2000® Index.

What is the significance of the Wells Fargo & Company guarantee?

The full and unconditional guarantee from Wells Fargo & Company means that the parent company is legally obligated to ensure that the obligations of Wells Fargo Finance LLC, including the repayment of principal and any interest on these notes, are met. This provides an additional layer of credit security for the noteholders.

Why is Wells Fargo filing this 8-K?

This 8-K filing is required to officially document and register the issuance of these new debt securities with the SEC. It provides investors with access to the specific terms of the notes and the legal opinions supporting their issuance, as part of the broader registration process initiated by their Form S-3 filing.

What are the potential risks for investors in these notes?

The primary risk for investors is the potential loss of principal if the linked equity indices (S&P 500® or Russell 2000®) perform poorly by the respective maturity dates. The exact terms of how principal is calculated at risk are detailed in the form of the note itself, which is filed as an exhibit.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

Wells Fargo & Company/MN (WFC) filed an 8-K on May 6, 2019, to disclose the issuance of new Medium-Term Notes, Series A. These notes are structured as "Principal at Risk Securities" and are linked to the performance of either the S&P 500® Index or the Russell 2000® Index, with maturity dates in May 2023 and March 2021. Wells Fargo & Company itself provides a full and unconditional guarantee for these notes. This filing primarily serves to provide the specific documentation and legal opinions related to these newly issued debt instruments. Investors should note that these are structured products where the principal repayment is contingent on the performance of the underlying equity indices. The inclusion of the legal opinion from Faegre Baker Daniels LLP aims to provide assurance on the legality and enforceability of the notes and the guarantee.

Key Highlights

1Wells Fargo Finance LLC issued three types of Medium-Term Notes, Series A, on May 5, 2019.
2The notes are classified as "Principal at Risk Securities," meaning principal repayment is linked to index performance.
3The notes are tied to either the S&P 500® Index or the Russell 2000® Index.
4Maturity dates for the notes are May 8, 2023, and March 4, 2021.
5Wells Fargo & Company (WFC) provides a full and unconditional guarantee for all issued notes.
6The 8-K filing includes the forms of the notes and a legal opinion from Faegre Baker Daniels LLP.
7This filing relates to the Registration Statement on Form S-3 previously filed by Wells Fargo.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (May 6, 2019)

Summary

Key Highlights

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