Terms

Series

Series J

Liquidation Preference

$25.00

Coupon Rate

4.8%

Rate Type

Fixed

Annual Dividend

$1.20

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

June 1, 2025

First Call Price

$25.00

Redemption Notice Period

15 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Non-Equity Claims On Capital One, Any Future Senior Preferred Stock Issued With Requisite Consent; Pari Passu With: Other Outstanding Series Of Capital One Preferred Stock (Six Series As Of Issuance Date); Senior To: Common Stock, All Other Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

50,000,000

Prospectus Summary

Capital One Financial Corporation (NYSE: COF) is offering 50,000,000 depositary shares, each representing a 1/40th interest in a share of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series J, priced at $25 per depositary share (liquidation preference $1,000 per underlying preferred share). The fixed coupon is 4.800% per annum, paid quarterly on March 1, June 1, September 1, and December 1, beginning June 1, 2020. The stock is non-cumulative — if the Board does not declare a dividend for any quarter, that dividend is permanently lost and Capital One has no obligation to make it up in future periods. As a holding company issue, the Series J Preferred ranks senior to Capital One's common stock and on parity with its six other outstanding preferred series, but is structurally subordinate to all existing and future debt obligations of Capital One (approximately $320.6 billion in total liabilities as of September 30, 2019) and to the prior claims of subsidiary creditors (including COBNA and CONA depositors). Capital One may redeem the Preferred Stock in whole at any time within 90 days of a 'regulatory capital treatment event' — triggered if a change in law or regulation creates more than an insubstantial risk that the shares will no longer qualify as Tier 1 Capital under Federal Reserve guidelines. This provision protects the issuer's capital structure flexibility but introduces reinvestment risk for holders. At the $25 offering price, the Series J yields 4.80% annually ($1.20 per depositary share per year, or $0.30 per quarter). Dividends are expected to qualify as 'qualified dividend income' for non-corporate U.S. holders (eligible for the 15%/20% preferential rate) and may qualify for the dividends-received deduction for corporate holders, provided Capital One has sufficient current or accumulated earnings and profits. Record dates fall on the 15th calendar day before each payment date. The dividend stopper prevents Capital One from paying dividends on common stock or repurchasing junior stock if the preceding period's full preferred dividend has not been paid or set aside, though since dividends are non-cumulative, a skipped quarter creates no ongoing obligation.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Capital One has not paid full dividends on the Series J Preferred Stock for the preceding dividend period, it cannot declare or pay dividends on common stock or any other junior stock, and cannot repurchase junior or parity stock (subject to limited exceptions); dividends on parity preferred are allocated proportionally if not paid in full.

Other Preferreds from Capital One Financial Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 46 (Average)