What are 'Principal at Risk Securities'?

'Principal at Risk Securities' are a type of investment product, often structured notes, where the return of the principal amount invested is not guaranteed. The repayment of principal, and any potential gains, are typically linked to the performance of an underlying asset, index, or basket of assets. If the underlying asset performs poorly, investors may lose a portion or all of their initial investment.

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 obligated to fulfill the payment obligations of Wells Fargo Finance LLC under these Notes. This provides an additional layer of credit support for investors, as the creditworthiness of Wells Fargo & Company itself is relevant to the security of their investment.

What is the purpose of filing the 'Form of Note' and legal opinion?

Filing the 'Form of Note' provides investors and regulators with the exact terms and conditions of the debt securities being issued. The legal opinion from Faegre Baker Daniels LLP confirms the legality and enforceability of the Notes and the Guarantee, which are critical components for investor confidence and regulatory compliance.

Are these notes suitable for all investors?

Given their nature as 'Principal at Risk Securities' and their link to market indices, these notes are generally suitable for investors who understand the associated risks, including the potential loss of principal, and who have a specific investment objective that aligns with this type of structured product. They are not typically considered a conservative investment.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

Wells Fargo & Company/MN (WFC) filed an 8-K on June 24, 2019, to report the issuance of two new series of Medium-Term Notes, Series A, by its subsidiary Wells Fargo Finance LLC. These are "Principal at Risk Securities" linked to specific equity market indices, indicating a structured product with potential for both principal loss and gains tied to market performance. The Notes mature in 2022 and 2024, respectively. Crucially for investors, the parent company, Wells Fargo & Company, fully and unconditionally guarantees these notes. This filing primarily serves to provide the official documentation for these notes, including their forms and a legal opinion from Faegre Baker Daniels LLP. Investors considering these specific notes should understand their derivative nature and the associated risks, as well as the creditworthiness of Wells Fargo & Company due to the guarantee.

Key Highlights

1Wells Fargo Finance LLC issued new Medium-Term Notes, Series A, on June 23, 2019.
2The notes are structured as 'Principal at Risk Securities', meaning investors could lose principal.
3Two note series were issued: one linked to the S&P 500® Index (due 2022) and another linked to the lowest performing of the Dow Jones Industrial Average®, Russell 2000® Index, and Nasdaq-100 Index® (due 2024).
4Wells Fargo & Company provides a full and unconditional guarantee for these notes.
5The 8-K filing includes the forms of the notes and a legal opinion from Faegre Baker Daniels LLP.
6This filing relates to a Registration Statement on Form S-3 previously filed by WFC and its subsidiary.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Jun 24, 2019)

Summary

Key Highlights

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