Summary
Wells Fargo & Company (WFC) announced on February 28, 2020, a significant corporate restructuring involving the liquidation of two of its special purpose entities: Wells Fargo Capital X and First Union Capital II. This action is scheduled for March 30, 2020, and will result in the cancellation of existing Capital Securities and Common Securities issued by these entities. As part of the liquidation, holders of these securities will receive distributions of Debentures issued by Wells Fargo & Company. Specifically, holders of Wells Fargo Capital Securities will receive an equivalent principal amount of 5.95% Capital Efficient Notes due 2086, and holders of First Union Capital Securities will receive 7.95% Junior Subordinated Deferrable Interest Debentures, Series B Due November 15, 2029. This exchange mechanism aims to simplify the company's capital structure.
Key Highlights
- 1Wells Fargo is liquidating two capital vehicles: Wells Fargo Capital X and First Union Capital II.
- 2The liquidation is set to occur on March 30, 2020.
- 3Existing Capital Securities and Common Securities from these entities will be cancelled.
- 4Holders of Wells Fargo Capital Securities will receive 5.95% Capital Efficient Notes due 2086.
- 5Holders of First Union Capital Securities will receive 7.95% Junior Subordinated Deferrable Interest Debentures, Series B Due November 15, 2029.
- 6The company aims to simplify its capital structure through this transaction.
- 7The principal amount of Debentures distributed to Wells Fargo & Company as holder of Common Securities will be extinguished.