Capital One Closes $1.75B Subordinated Notes Offering

Capital One Financial Corp (NYSE:COF), a $78 billion market cap financial services giant, announced the closure of a public offering of $1.75 billion in subordinated notes, according to a recent SEC filing. The offering, which concluded on Thursday, involved the sale of 6.183% Fixed-to-Floating Rate Subordinated Notes due 2036. According to InvestingPro analysis, the company currently trades near its 52-week high of $207.24 and shows signs of being slightly undervalued based on its Fair Value assessment.

The transaction was managed by a syndicate of underwriters including Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley (NYSE:MS) & Co. LLC, Wells Fargo (NYSE:WFC) Securities, LLC, and Capital One Securities, Inc. The notes were issued under a Subordinated Indenture dated August 29, 2006, and supplemented by a First Supplemental Indenture dated Thursday.

The notes, which have been registered under the Securities Act of 1933, were offered via a registration statement on Form S-3. Capital One reported that the sale was conducted in accordance with an underwriting agreement dated January 28, 2025.

This financial move by Capital One, a company with a primary classification in national commercial banks, adds to its capital structure and extends its debt profile. The company has demonstrated strong financial performance, with InvestingPro data showing a remarkable 35% return over the past six months and maintaining dividend payments for 30 consecutive years. The notes are expected to be traded on the New York Stock Exchange under the company’s existing securities listings. For deeper insights into Capital One’s financial health, which InvestingPro rates as "GREAT," investors can access the comprehensive Pro Research Report, available exclusively to subscribers.

The details of the underwriting agreement, the notes, the supplemental indenture, and other related documents are outlined in the exhibits attached to the SEC Form 8-K filing. The documents provide more comprehensive information about the terms and conditions of the notes offering.

Investors and interested parties can refer to Capital One’s SEC filing for a complete understanding of the transaction. The company, headquartered in McLean, Virginia, is known for its financial services including credit cards, auto loans, banking, and savings accounts. This information is based on the press release statement and SEC filings made by Capital One Financial Corp.

In other recent news, Capital One Financial Corporation has been the subject of multiple analyst upgrades. Truist Securities raised their price target for the company to $257, maintaining a Buy rating, following upward revisions of the company’s projected earnings per share (EPS) for the coming years. Similarly, TD Cowen increased the price target for Capital One from $190 to $195, while RBC Capital Markets lifted their target to $200, and Jefferies set their target at $225.

In a separate development, Capital One provided an update on its ongoing merger with Discover Financial Services (NYSE:DFS), an event that is expected to enhance the company’s market position. The merger is subject to regulatory approval, and involves certain risks and uncertainties.

Furthermore, Capital One reported an adjusted EPS of $3.09 for the fourth quarter, surpassing consensus estimates due to higher non-interest income and a lower than expected allowance for credit losses. These recent developments reflect the analysts’ confidence in Capital One’s ability to thrive in the current economic climate and its potential to deliver value to shareholders in the near future.

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