Terms

Series

Series K

Liquidation Preference

$25.00

Coupon Rate

4.625%

Rate Type

Fixed

Annual Dividend

$1.16

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 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 Holder Consent; Pari Passu With: Each Other Series Of Preferred Stock Issued Or To Be Issued Unless Expressly Senior Or Junior, Six Existing Series Of Parity Preferred Stock Outstanding As Of The Prospectus Date; Senior To: Common Stock, Any 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

5,000,000

Prospectus Summary

Capital One Financial Corporation (NYSE: COF) is offering 5,000,000 depositary shares, each representing a 1/40th interest in a share of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series K (NYSE: COFPRK), with a liquidation preference of $25.00 per depositary share. The fixed dividend rate is 4.625% per annum, equating to approximately $0.2891 per depositary share per quarter. The stock is non-cumulative, meaning that if Capital One's board does not declare a dividend in any quarter, that dividend is permanently forfeited and investors have no claim to recover it in future periods. Capital One may redeem the shares at $25.00 per depositary share on any dividend payment date on or after December 1, 2025. The Series K Preferred Stock sits above common stock and at parity with Capital One's six other outstanding preferred series, but ranks junior to all of the holding company's existing and future debt and other non-equity claims (~$365 billion in total liabilities as of June 30, 2020). As a holding company issue, it is structurally subordinated — Capital One's ability to pay dividends depends entirely on upstreamed dividends from its bank subsidiaries (COBNA and CONA), which are subject to OCC and Federal Reserve capital regulations. A regulatory capital call provision allows Capital One to redeem all (not part) of the Preferred Stock within 90 days if a change in law or regulation creates more than an insubstantial risk that the stock will lose its Additional Tier 1 capital qualification — a meaningful risk that could accelerate redemption at an inopportune time for investors. At the $25.00 offering price, the effective yield is 4.625%. Dividends are paid quarterly on March 1, June 1, September 1, and December 1, with a record date falling on the 15th calendar day before each payment date. Distributions may qualify for the preferential 15%/20% qualified dividend income (QDI) rate for non-corporate holders and for the dividends-received deduction (DRD) for corporate holders, provided Capital One has sufficient current or accumulated earnings and profits — a condition that may not always be met. The dividend stopper provision blocks any dividends or repurchases on common stock and other junior securities unless the Preferred Stock's preceding period dividend has been paid in full or set aside, protecting preferred holders from being leapfrogged by junior distributions.

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 Preferred Stock for the preceding dividend period, it cannot declare or pay dividends on common stock or other junior stock (subject to limited exceptions), nor repurchase or redeem junior stock or parity stock for consideration (subject to limited exceptions).

Other Preferreds from Capital One Financial Corporation

Div Score Breakdown

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