Terms

Series

Series DD

Liquidation Preference

$25.00

Coupon Rate

5.75%

Rate Type

Fixed

Annual Dividend

$1.44

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 1, 2023

First Call Price

$25.00

Redemption Notice Period

5 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Non-Equity Claims; Pari Passu With: Other Outstanding Series Of Preferred Stock; Senior To: Common Stock, Capital Stock Ranking Junior To The Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.0025

Shares Offered

59,000,000

Prospectus Summary

Wells Fargo & Company is offering 59,000,000 depositary shares, each representing a 1/400th interest in a share of its perpetual 5.75% Non-Cumulative Preferred Stock, Series DD, with a liquidation preference of $25 per depositary share. Dividends are paid quarterly at an annual rate of $1.4375 per depositary share (approximately $0.359375 per quarter), on March 1, June 1, September 1, and December 1, beginning December 1, 2018. Because the dividends are non-cumulative, if Wells Fargo's board does not declare a dividend for any period, that dividend is permanently lost — holders have no right to recover it in future periods. The Series DD Preferred Stock sits above common stock and all junior capital stock in Wells Fargo's capital structure, but is subordinate to all existing and future debt and non-equity claims. As a holding company issue, the preferred stock is structurally subordinated to obligations of Wells Fargo's operating bank subsidiary, whose creditors have prior claims on subsidiary assets. Wells Fargo may redeem the Series DD at par ($25 per depositary share) on any dividend payment date on or after December 1, 2023. In addition, a regulatory capital call permits full redemption within 90 days if a change in law or regulation creates more than an insubstantial risk that the Series DD will no longer qualify as Additional Tier 1 capital — a meaningful risk given ongoing Basel III implementation and potential future regulatory changes. At the $25 offering price, the effective yield is 5.75% annually. Dividends are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for non-corporate U.S. holders, provided holding period requirements are met; corporate holders are generally eligible for a 50% dividends-received deduction. The record date is set by the board, not more than 30 days before each payment date. The dividend stopper provision means that if the Series DD dividend for the most recently completed period has not been paid in full, Wells Fargo cannot pay dividends on common stock or any junior capital stock — providing a degree of protection for preferred holders, though the non-cumulative nature means any skipped dividend remains permanently forfeited.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Wells Fargo has not paid full dividends on the Series DD Preferred Stock for the most recently completed dividend period, it may not pay dividends on or repurchase common stock or any junior capital stock (subject to limited exceptions such as stock-settled dividends and employee benefit plan repurchases).

Other Preferreds from JPMorgan Chase & Co

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 64 (Strong)