Terms

Series

Series N

Liquidation Preference

$25.00

Coupon Rate

4.25%

Rate Type

Fixed

Annual Dividend

$1.06

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 And Other Non-Equity Claims On Capital One, Any Future Senior Preferred Stock Issued With Requisite Holder Consent; Pari Passu With: Other Outstanding Series Of Preferred Stock (Eight Series As Of Offering 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

17,000,000

Prospectus Summary

Capital One Financial Corporation (NYSE: COF) is offering 17,000,000 depositary shares, each representing a 1/40th interest in a share of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series N, with a liquidation preference of $25 per depositary share ($1,000 per underlying preferred share). The fixed coupon is 4.25% per annum, translating to approximately $0.2656 per depositary share per quarter. Capital One may redeem the shares at $25 on any dividend payment date on or after September 1, 2026. Critically, dividends are non-cumulative: if the Board does not declare a dividend for any period, that dividend is permanently forfeited and investors have no right to recover it in future periods. The Series N Preferred ranks senior to Capital One's common stock and on parity with its eight other outstanding preferred series, but is subordinate to all existing and future debt obligations of Capital One Financial Corporation (approximately $364 billion in total liabilities as of March 31, 2021). As a holding company issue, it is also structurally subordinated to all liabilities of operating subsidiaries (COBNA and CONA), because Capital One's cash flow depends on upstream dividends from those bank subsidiaries, which are subject to regulatory restrictions. A regulatory capital treatment event call allows full redemption within 90 days if a change in law causes the Series N to lose its additional Tier 1 capital qualification — a meaningful risk for investors expecting long-term income, since regulators could effectively force early redemption. At the $25 offering price, the Series N yields exactly 4.25% annually, with quarterly payments on March 1, June 1, September 1, and December 1 (first payment December 1, 2021). The record date is the 15th calendar day before each payment date. Distributions are expected to qualify as 'qualified dividend income' for non-corporate U.S. holders (subject to the 15%/20% preferential rate) and for the dividends-received deduction for corporate holders, provided Capital One has sufficient current or accumulated earnings and profits. Dividend stopper mechanics prohibit Capital One from paying dividends on common stock or repurchasing junior stock unless full Series N dividends for the prior period have been paid; however, because dividends are non-cumulative and discretionary, the Board can skip a period entirely without triggering any legal obligation to make holders whole.

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 N Preferred Stock for the prior period, it cannot declare or pay dividends on common stock or any other junior stock (subject to limited exceptions), and cannot repurchase junior or parity stock; conversely, if any future senior preferred stock exists and its dividends are unpaid, dividends on the Series N cannot be paid.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 67 (Strong)