What are "Principal at Risk Securities"?

"Principal at Risk Securities" are a type of structured note where the repayment of the principal amount at maturity is linked to the performance of an underlying asset, such as a stock index. If the underlying index performs poorly, investors may receive less than their initial principal investment.

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

The guarantee from Wells Fargo & Company means that the parent company is legally obligated to ensure that the obligations of Wells Fargo Finance LLC under these notes are met. This provides an additional layer of credit assurance for investors, as they can rely on the financial strength of the parent company if the subsidiary were unable to meet its obligations.

Why is this filing being made?

This 8-K filing is being made to formally submit the documentation related to the issuance of the Medium-Term Notes, Series A. This includes the specific terms and structure of the notes and the legal opinion from the issuer's counsel, as required by securities regulations for such offerings.

Are these notes a new way for Wells Fargo to raise capital?

Yes, the issuance of these Medium-Term Notes represents a method for Wells Fargo Finance LLC, supported by its parent, to raise capital through the debt markets. The "Principal at Risk" structure may appeal to a specific segment of investors seeking potential upside linked to market indices, while also understanding the associated risks.

WELLS FARGO & COMPANY/MN 8-K SEC Disclosure

Summary

This 8-K filing by Wells Fargo & Company/MN (WFC) primarily concerns the issuance of new debt instruments and related documentation. Specifically, on December 2, 2019, Wells Fargo Finance LLC, a subsidiary, issued two types of "Principal at Risk Securities" linked to the Russell 2000® Index and the S&P 500 Index, with a maturity date of January 22, 2021. These "Medium-Term Notes, Series A" are fully and unconditionally guaranteed by the parent company, Wells Fargo & Company. The purpose of this filing is to publicly disclose the forms of these Notes and the legal opinion from Faegre Baker Daniels LLP regarding their validity and the Guarantee. Investors should note that these are debt securities with principal repayment contingent on index performance, and the guarantee from the parent company provides an additional layer of credit support.

Key Highlights

1Wells Fargo Finance LLC issued "Principal at Risk Securities" (Medium-Term Notes, Series A) on December 2, 2019.
2The notes are linked to the performance of the Russell 2000® Index and the S&P 500 Index.
3The maturity date for these notes is January 22, 2021.
4Wells Fargo & Company (the parent company) provides a full and unconditional guarantee for these notes.
5The 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 with the SEC.

WELLS FARGO & COMPANY/MN 8-K Report, Exhibit Filing (Dec 2, 2019)

Summary

Key Highlights

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