Terms

Series

Non-Cumulative Perpetual Class A Preferred Stock, Series Z

Liquidation Preference

$25.00

Coupon Rate

4.75%

Rate Type

Fixed

Annual Dividend

$1.19

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

March 15, 2025

First Call Price

$25.00

Redemption Notice Period

40 days

Capital Stack Ranking

Junior To: All Debt Obligations And Creditors Of Wells Fargo & Company, Any Preferred Or Preference Stock Expressly Made Senior To Series Z With Requisite Holder Consent; Pari Passu With: Parity Stock — Other Series Of Preferred Or Preference Stock Ranking Equally As To Dividends And Liquidation; Senior To: Common Stock, Any Junior Stock Expressly Made Junior To Series Z Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

70,000,000

Prospectus Summary

Wells Fargo & Company is offering 70,000,000 depositary shares (each representing a 1/1,000th interest in a share) of its Non-Cumulative Perpetual Class A Preferred Stock, Series Z, with a liquidation preference of $25 per depositary share and a fixed annual dividend rate of 4.75% ($1.1875 per depositary share, or approximately $0.297 per quarter), payable on March 15, June 15, September 15, and December 15, with the first payment on March 15, 2020. The Series Z is non-cumulative, meaning if Wells Fargo's board does not declare a dividend for any period, that dividend is permanently forfeited — holders have no right to recover it in the future. The preferred is perpetual with no mandatory redemption, and is callable at $25 per depositary share on or after March 15, 2025. The Series Z Preferred Stock sits above common stock and other junior stock in the capital structure, and ranks on par with Wells Fargo's other outstanding series of preferred and preference stock as to dividends and liquidation distributions. It is structurally junior to all debt obligations of Wells Fargo & Company, and as a holding company issue, it is also structurally subordinated to all claims against Wells Fargo's bank subsidiary. Under the Dodd-Frank orderly liquidation authority, the preferred may be fully subordinated to U.S. government interests in a receivership. A regulatory capital treatment event call allows Wells Fargo to redeem the entire issue at $25 prior to March 15, 2025 if a change in law or regulation creates a meaningful risk that the preferred will no longer qualify as Tier 1 capital — an important investor risk in an evolving Basel/regulatory environment. At the $25 offering price, the Series Z yields 4.75% annually. Dividends are expected to qualify as qualified dividend income (QDI) taxable at the 15%/20% preferential rate for individual U.S. holders, and should qualify for the dividends-received deduction (DRD) for eligible corporate holders. The record date is the last business day of the month preceding each payment month. Dividend stopper mechanics mean that if Wells Fargo has not declared full Series Z dividends for the current period, it cannot pay dividends on common stock or repurchase junior stock — providing a meaningful, though not absolute, protection for preferred holders, since the non-cumulative feature means missed dividends are lost forever.

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 Z Preferred Stock for the current period, it is blocked from paying dividends on or repurchasing its common stock and other junior stock, and from redeeming parity stock except on a pro rata basis.

Other Preferreds from Wells Fargo & Company

Div Score Breakdown

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