Terms

Series

Series L

Liquidation Preference

$25.00

Coupon Rate

4.375%

Rate Type

Fixed

Annual Dividend

$1.09

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 1, 2026

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, All Other Non-Equity Claims, Deposits And Other Liabilities, Any Future Senior Preferred Stock Issued With Required Consent; Pari Passu With: Other Outstanding Series Of Preferred Stock (Six Series As Of Prospectus Date), Future Parity Preferred Stock; 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

27,000,000

Prospectus Summary

Capital One Financial Corporation (NYSE: COF) is offering 27,000,000 depositary shares, each representing a 1/40th interest in a share of its Series L Fixed Rate Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25 per depositary share ($1,000 per underlying preferred share). The fixed coupon is 4.375% per annum, equating to approximately $0.2734 per depositary share quarterly ($1.09375 annually). The stock is perpetual with no maturity date and is callable at par beginning September 1, 2026. Critically, dividends are non-cumulative — if the board omits a dividend for any quarter, that payment is permanently lost and Capital One has no obligation to make it up in future periods. The Series L Preferred ranks senior to Capital One's common stock and on par with its six other existing preferred series, but is junior to all of Capital One's debt obligations (~$364 billion in total liabilities as of March 2021), deposits, and other non-equity claims. As a holding company issue, it is structurally subordinated to the obligations of Capital One's bank subsidiaries (COBNA and CONA), whose ability to upstream dividends to the holding company is subject to regulatory constraints. A regulatory capital treatment event call allows Capital One to redeem the entire issue within 90 days if a change in law or regulation causes the preferred to lose its status as additional Tier 1 capital — a meaningful risk that could force redemption at an inopportune time for investors. At par ($25), the Series L yields 4.375% annually, paid quarterly on March 1, June 1, September 1, and December 1, with the first payment on September 1, 2021. The record date is the 15th calendar day prior to each payment date. Dividends are expected to qualify as 'qualified dividend income' for non-corporate U.S. holders (15%/20% preferential rates) and for the dividends-received deduction for corporate holders, provided Capital One has sufficient current or accumulated earnings and profits — which is not guaranteed in future years. The dividend stopper provision blocks payments on common stock and junior securities if full preferred dividends for the prior period have not been paid or set aside, providing a measure of protection to preferred holders relative to common stockholders.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Capital One does not pay full dividends on the Preferred Stock for the preceding dividend period, it is blocked from paying dividends on or repurchasing common stock and other junior securities (with limited exceptions), and from repurchasing parity preferred stock except on a pro rata basis.

Other Preferreds from Capital One Financial Corporation

Div Score Breakdown

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