Terms

Series

Non-Cumulative Perpetual Class A Preferred Stock, Series Y

Liquidation Preference

$25.00

Coupon Rate

5.625%

Rate Type

Fixed

Annual Dividend

$1.41

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

June 15, 2022

First Call Price

$25.00

Redemption Notice Period

40 days

Capital Stack Ranking

Junior To: All Debt Obligations And Liabilities Of Wells Fargo & Company, Interests Held By The U.S. Government Under Dodd-Frank Orderly Liquidation Authority; Pari Passu With: Parity Stock (Other Preferred Or Preference Stock Ranking Equally As To Dividends And Liquidation); Senior To: Common Stock, Junior Stock (Any Class Expressly Junior To Series Y)

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

24,000,000

Prospectus Summary

Wells Fargo & Company is offering 24,000,000 depositary shares, each representing a 1/1,000th interest in a share of its Non-Cumulative Perpetual Class A Preferred Stock, Series Y, with a liquidation preference of $25 per depositary share and a fixed coupon of 5.625% per annum ($1.40625 annually, or ~$0.352 per quarter). The stock is callable at par on or after June 15, 2022 on any dividend payment date. Critically, the Series Y is non-cumulative: if the board does not declare a dividend for any quarter, that dividend is permanently forfeited and will never be owed to investors. As a holding company obligation, the Series Y ranks junior to all of Wells Fargo's debt and other liabilities, and structurally subordinate to the claims of creditors of its principal subsidiary, Wells Fargo Bank, N.A. It ranks senior to common stock and any expressly junior preferred, and pari passu with other outstanding preferred series. A regulatory capital call allows Wells Fargo to redeem the entire issue at $25 per depositary share before June 15, 2022 if regulators determine the stock can no longer count as Tier 1 capital — a risk that could force early redemption at par regardless of market price, particularly relevant in a shifting regulatory environment. At a $25 purchase price, the Series Y offers a 5.625% current yield, payable quarterly on March 15, June 15, September 15, and December 15 (commencing June 15, 2017), with a record date on the last business day of the preceding calendar month. Dividends from Wells Fargo, a domestic C-corporation, are generally expected to qualify as qualified dividend income (QDI) for individual investors taxed at the 15%/20% preferential rate, and for the dividends-received deduction (DRD) for eligible corporate holders. The dividend stopper provision means that if a Series Y dividend is skipped for any period, Wells Fargo cannot pay dividends on common stock or junior preferred until current-period Series Y dividends are fully paid.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Wells Fargo has not paid the full current-period dividend on the Series Y Preferred Stock, it may not pay dividends on or repurchase common stock or any junior preferred stock; parity preferred stock dividends may only be paid on a proportional basis alongside Series Y dividends.

Other Preferreds from Wells Fargo & Company

Div Score Breakdown

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