Terms

Series

7.50% Non-Cumulative Perpetual Convertible Class A Preferred Stock, Series L

Liquidation Preference

$1,000.00

Coupon Rate

7.5%

Rate Type

Fixed

Annual Dividend

$75.00

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

Yes

Callable

No

Capital Stack Ranking

Junior To: All Indebtedness And Other Non-Equity Claims On Wachovia, All Liabilities Of Wachovia'S Subsidiaries, Liquidation Preference Of Any Preferred Stock Of Wachovia'S Subsidiaries; Pari Passu With: Series J Preferred Stock (8.00% Non-Cumulative Perpetual Class A Preferred Stock), Series K Preferred Stock (Fixed-To-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock), Series I Preferred Stock (When Issued); Senior To: Wachovia Common Stock, Junior Stock (Any Class Or Series Ranking Below Series L)

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Shares Offered

3,500,000

Prospectus Summary

Wachovia Corporation issued 3,500,000 shares of its 7.50% Non-Cumulative Perpetual Convertible Class A Preferred Stock, Series L, with a $1,000 liquidation preference per share, in April 2008. The stock pays a fixed annual dividend of $75.00 per share (7.50% on the $1,000 liquidation preference), distributed quarterly on March 15, June 15, September 15, and December 15. Critically, dividends are non-cumulative: if Wachovia's board does not declare a dividend for any quarter, that payment is permanently forfeited — holders have no claim to recover it in future periods. Shares are convertible at the holder's option into 32.0513 shares of common stock (equivalent to ~$31.20/share), and Wachovia may force conversion on or after March 15, 2013 if its common stock trades above 130% of the conversion price for 20 of 30 consecutive trading days. The Series L Preferred Stock sits above Wachovia's common stock and all other junior equity in the capital stack, and ranks pari passu with the Series J (8.00%) and Series K (Fixed-to-Floating) Class A Preferred Stock. However, as a holding company instrument, the Series L is structurally subordinated to all debt obligations of Wachovia Corporation and to all liabilities and preferred stock of its banking subsidiaries — meaning subsidiary creditors have prior claims on subsidiary assets before any funds flow up to service the preferred. There is no regulatory capital call provision; the Series L is not redeemable under any circumstances. Notably, if Wachovia defers interest on certain outstanding junior subordinated debt or triggers an event of default under certain indentures, dividend payments on the Series L would be prohibited during that period. At par ($1,000), the Series L yields 7.50% annually ($18.75 per quarter). Dividends are expected to qualify as qualified dividend income (QDI) for non-corporate U.S. holders, taxable at a maximum 15% rate (for tax years before 2011), provided the 60-day holding period requirement is met; corporate holders may claim a 70% dividends-received deduction. The record date for each payment is the last calendar day of the month preceding the payment month (e.g., February 28/29 for the March 15 payment). The dividend stopper prevents Wachovia from paying any dividends on common or junior/parity stock unless full Series L dividends for the current period have been paid or set aside — but because dividends are non-cumulative, a skipped quarter creates no future obligation.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Wachovia has not paid full dividends on the Series L Preferred Stock for the current Dividend Period, it may not pay dividends on common stock or other junior/parity securities, nor repurchase such securities, except in limited circumstances. Additionally, if Wachovia defers interest on certain outstanding debt securities or an event of default occurs under certain debt indentures, it would be prohibited from paying dividends on the Series L Preferred Stock.

Other Preferreds from Wells Fargo & Company

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 63 (Strong)