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Additional
Information about the Issuer, the Guarantor and the Securities
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You should read this pricing supplement together with the market measure supplement dated May 18, 2018, the prospectus supplement
dated May 18, 2018 and the prospectus dated April 5, 2019 for additional information about the securities. When you read the accompanying
market measure supplement and prospectus supplement, please note that all references in such supplements to the prospectus dated
April 27, 2018, or to any sections therein, should refer instead to the accompanying prospectus dated April 5, 2019 or to the corresponding
sections of such prospectus, as applicable. Information included in this pricing supplement supersedes information in the market
measure supplement, prospectus supplement and prospectus to the extent it is different from that information. Certain defined terms
used but not defined herein have the meanings set forth in the prospectus supplement.
When we refer to “we,” “us” or
“our” in this pricing supplement, we refer only to Wells Fargo Finance LLC and not to any of its affiliates, including
Wells Fargo & Company.
You may access the market measure supplement, prospectus
supplement and prospectus on the SEC website www.sec.gov as follows (or if such address has changed, by reviewing our filing for
the relevant date on the SEC website):
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Market
Measure Supplement dated May 18, 2018:
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https://www.sec.gov/Archives/edgar/data/72971/000119312518167616/d593569d424b2.htm
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Prospectus Supplement dated May 18, 2018:
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https://www.sec.gov/Archives/edgar/data/72971/000119312518167593/d523952d424b2.htm
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Prospectus dated April 5, 2019:
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https://www.sec.gov/Archives/edgar/data/72971/000138713119002551/wfc-424b2_040519.htm
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Estimated
Value of the Securities
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The original offering price of each security of $1,000 includes
certain costs that are borne by you. Because of these costs, the estimated value of the securities on the pricing date is less
than the original offering price. The costs included in the original offering price relate to selling, structuring, hedging and
issuing the securities, as well as to our funding considerations for debt of this type.
The costs related to selling, structuring, hedging and
issuing the securities include (i) the agent discount (if any), (ii) the projected profit that our hedge counterparty (which may
be one of our affiliates) expects to realize for assuming risks inherent in hedging our obligations under the securities and (iii)
hedging and other costs relating to the offering of the securities.
Our funding considerations take into account the higher
issuance, operational and ongoing management costs of market-linked debt such as the securities as compared to conventional debt
of Wells Fargo & Company of the same maturity, as well as our and our affiliates’ liquidity needs and preferences. Our
funding considerations are reflected in the fact that we determine the economic terms of the securities based on an assumed rate
that is generally lower than our internal funding rate, which is described below and is used in determining the estimated value
of the securities.
If the costs relating to selling, structuring, hedging
and issuing the securities were lower, or if the assumed rate we use to determine the economic terms of the securities were higher,
the economic terms of the securities would be more favorable to you and the estimated value would be higher. The estimated value
of the securities as of the pricing date is set forth on the cover page of this pricing supplement.
Determining the estimated value
Our affiliate, Wells Fargo Securities, LLC (“WFS”),
calculated the estimated value of the securities set forth on the cover page of this pricing supplement based on its proprietary
pricing models. Based on these pricing models and related market inputs and assumptions referred to in this section below, WFS
determined an estimated value for the securities by estimating the value of the combination of hypothetical financial instruments
that would replicate the payout on the securities, which combination consists of a non-interest bearing, fixed-income bond (the
“debt component”) and one or more derivative instruments underlying the economic terms of the securities (the
“derivative component”).
The estimated value of the debt component is based on
an internal funding rate that reflects, among other things, our and our affiliates’ view of the funding value of the securities.
This rate is used for purposes of determining the estimated value of the securities since we expect secondary market prices, if
any, for the securities that are provided by WFS or any of its affiliates to generally reflect such rate. WFS determined the estimated
value of the securities based on this internal funding rate, rather than the assumed rate that we use to determine the economic
terms of the securities, for the same reason.
WFS calculated the estimated value of the derivative component
based on a proprietary derivative-pricing model, which generated a theoretical price for the derivative instruments that constitute
the derivative component based on various inputs, including the “derivative component factors” identified in “Risk
Factors—The Value Of The Securities Prior To Stated Maturity Will Be Affected By Numerous Factors, Some Of Which Are Related
In Complex Ways.” These inputs may be market-observable or may be based on assumptions made by WFS in its discretion.
The estimated value of the securities determined by WFS
is subject to important limitations. See “Risk Factors—The Estimated Value Of The Securities Is Determined By Our Affiliate’s
Pricing Models, Which May Differ From Those Of Other Dealers” and “—Our And The Guarantor’s Economic Interests
And Those Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests.”
Valuation of the securities after issuance
The estimated value of the securities is not an indication of
the price, if any, at which WFS or any other person may be willing to buy the securities from you in the secondary market. The
price, if any, at which WFS or any of its affiliates may purchase the securities in the secondary market will be based upon WFS’s
proprietary pricing models and will fluctuate over the term of the securities due to changes in market conditions and other relevant
factors. However, absent changes in these market conditions and other relevant factors, except as otherwise described in the following
paragraph, any secondary market price will be lower than the estimated value on the pricing date because the secondary market price
will be reduced by a bid-offer spread, which may vary depending on the aggregate face amount of the securities to be purchased
in the secondary market transaction, and the expected cost of unwinding any related hedging transactions. Accordingly, unless market
conditions and other relevant factors change significantly in your favor, any secondary market price for the securities is likely
to be less than the original offering price.
If WFS or any of its affiliates makes a secondary market
in the securities at any time up to the issue date or during the 3-month period following the issue date, the secondary market
price offered by WFS or any of its affiliates will be increased by an amount reflecting a portion of the costs associated with
selling, structuring, hedging and issuing the securities that are included in the original offering price. Because this portion
of the costs is not fully deducted upon issuance, any secondary market price offered by WFS or any of its affiliates during this
period will be higher than it would be if it were based solely on WFS’s proprietary pricing models less the bid-offer
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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spread
and hedging unwind costs described above. The amount of this increase in the secondary market price will decline steadily to zero
over this 3-month period. If you hold the securities through an account at WFS or any of its affiliates, we expect that this increase
will also be reflected in the value indicated for the securities on your brokerage account statement.
If WFS or any of its affiliates makes a secondary market
in the securities, WFS expects to provide those secondary market prices to any unaffiliated broker-dealers through which the securities
are held and to commercial pricing vendors. If you hold your securities through an account at a broker-dealer other than WFS or
any of its affiliates, that broker-dealer may obtain market prices for the securities from WFS (directly or indirectly), but could
also obtain such market prices from other sources, and may be willing to purchase the securities at any given time at a price that
differs from the price at which WFS or any of its affiliates is willing to purchase the securities. As a result, if you hold your
securities through an account at a broker-dealer other than WFS or any of its affiliates, the value of the securities on your brokerage
account statement may be different than if you held your securities at WFS or any of its affiliates.
The securities will not be listed or displayed on any
securities exchange or any automated quotation system. Although WFS and/or its affiliates may buy the securities from investors,
they are not obligated to do so and are not required to make a market for the securities. There can be no assurance that a secondary
market will develop.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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We have designed the securities for investors who:
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seek 125% leveraged exposure to the upside performance
of the Index if the ending level is greater than the starting level, subject to the maximum return at maturity of 12.00% of the
original offering price;
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desire to limit downside exposure to the Index through
the 15% buffer;
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understand that if the ending level is less than the starting
level by more than 15%, they will receive less, and possibly 85% less, than the original offering price per security at maturity;
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are willing to forgo interest payments on the securities
and dividends on the securities included in the Index; and
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are willing to hold the securities until maturity.
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The securities are not designed for, and may not be a
suitable investment for, investors who:
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seek a liquid investment or are unable or unwilling to
hold the securities to maturity;
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are unwilling to accept the risk that the ending level
of the Index may decrease by more than 15% from the starting level;
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seek uncapped exposure to the upside performance of the
Index;
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seek full return of the original offering price of the
securities at stated maturity;
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are unwilling to purchase securities with an estimated
value as of the pricing date that is lower than the original offering price, as set forth on the cover page;
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are unwilling to accept the risk of exposure to the large
capitalization segment of the United States equity market;
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seek exposure to the Index but are unwilling to accept
the risk/return trade-offs inherent in the maturity payment amount for the securities;
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are unwilling to accept the credit risk of Wells Fargo
Finance LLC and Wells Fargo & Company to obtain exposure to the Index generally, or to the exposure to the Index that the securities
provide specifically; or
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prefer the lower risk of fixed income investments with
comparable maturities issued by companies with comparable credit ratings.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Determining Payment at Stated Maturity
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On the stated maturity date, you will receive a cash
payment per security (the maturity payment amount) calculated as follows:
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Hypothetical Payout Profile
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The following profile is based on a maximum return of
12.00% or $120.00 per security, a participation rate of 125% and a threshold level equal to 85% of the starting level. This graph
has been prepared for purposes of illustration only. Your actual return will depend on the actual ending level and whether you
hold your securities to maturity.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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The securities have complex features and investing in
the securities will involve risks not associated with an investment in conventional debt securities. You should carefully consider
the risk factors set forth below as well as the other information contained in this pricing supplement and the accompanying market
measure supplement, prospectus supplement and prospectus, including the documents they incorporate by reference. As described in
more detail below, the value of the securities may vary considerably before the stated maturity date due to events that are difficult
to predict and are beyond our control. You should reach an investment decision only after you have carefully considered with your
advisors the suitability of an investment in the securities in light of your particular circumstances.
If The Ending Level Is Less Than The Threshold Level,
You Will Receive Less, And Possibly 85% Less, Than The Original Offering Price Of Your Securities At Maturity.
We will not repay you a fixed amount on the securities
on the stated maturity date. The maturity payment amount will depend on the direction of and percentage change in the ending level
of the Index relative to the starting level and the other terms of the securities. Because the level of the Index will be subject
to market fluctuations, the maturity payment amount you receive may be more or less, and possibly significantly less, than the
original offering price of your securities.
If the ending level is less than the threshold level,
the maturity payment amount that you receive at maturity will be reduced by an amount equal to the decline in the level of the
Index to the extent it is below the threshold level (expressed as a percentage of the starting level). The threshold level is 85%
of the starting level. As a result, you may receive less, and possibly 85% less, than the original offering price per security
at maturity even if the level of the Index is greater than or equal to the starting level or the threshold level at certain times
during the term of the securities.
Even if the ending level is greater than the starting
level, the amount you receive at stated maturity may only be slightly greater than the original offering price, and your yield
on the securities may be less than the yield you would earn if you bought a traditional interest-bearing debt security of Wells
Fargo Finance LLC or another issuer with a similar credit rating with the same stated maturity date.
No Periodic Interest Will Be Paid On The Securities.
No periodic payments of interest will be made on the securities.
However, if the agreed-upon tax treatment is successfully challenged by the Internal Revenue Service (the “IRS”),
you may be required to recognize taxable income over the term of the securities. You should review the section of this pricing
supplement entitled “United States Federal Tax Considerations.”
Your Return Will Be Limited To The Maximum Return And
May Be Lower Than The Return On A Direct Investment In The Index.
The opportunity to participate in the possible increases
in the level of the Index through an investment in the securities will be limited because any positive return on the securities
will not exceed the maximum return. Furthermore, the effect of the participation rate will be progressively reduced for all ending
levels exceeding the ending level at which the maximum return is reached.
The Securities Are Subject To Credit Risk.
The securities are our obligations, are fully and unconditionally
guaranteed by the Guarantor and are not, either directly or indirectly, an obligation of any other third party. Any amounts payable
under the securities are subject to creditworthiness and you will have no ability to pursue any securities included in the Index
for payment. As a result, our and the Guarantor’s actual and perceived creditworthiness may affect the value of the securities
and, in the event we and the Guarantor were to default on the obligations under the securities and the guarantee, you may not receive
any amounts owed to you under the terms of the securities.
As A Finance Subsidiary, We Have No Independent Operations
And Will Have No Independent Assets.
As a finance subsidiary, we have no independent operations
beyond the issuance and administration of our securities and will have no independent assets available for distributions to the
holders of our securities if they make claims in respect of such securities in a bankruptcy, resolution or similar proceeding.
Accordingly, any recoveries by such holders will be limited to those available under the related guarantee by the Guarantor and
that guarantee will rank pari passu with all other unsecured, unsubordinated obligations of the Guarantor. Holders will
have recourse only to a single claim against the Guarantor and its assets under the guarantee. Holders of the securities should
accordingly assume that in any such proceedings they would not have any priority over and should be treated pari passu with the
claims of other unsecured, unsubordinated creditors of the Guarantor, including holders of unsecured, unsubordinated debt securities
issued by the Guarantor.
Holders Of The Securities
Have Limited Rights Of Acceleration.
Payment of principal on the securities may be accelerated
only in the case of payment defaults that continue for a period of 30 days, certain events of bankruptcy or insolvency relating
to Wells Fargo Finance LLC only, whether voluntary or involuntary, certain situations under which the guarantee ceases to be in
full force and effect or if the Guarantor denies or disaffirms its obligations under the guarantee. If you purchase the securities,
you will have no right to accelerate the payment of principal on the securities if we fail in the performance of any of our obligations
under the securities, other than the obligations to pay principal and interest on the securities.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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See “Description of Debt
Securities of Wells Fargo Finance LLC —Events of Default and Covenant Breaches” in the accompanying prospectus.
Holders Of The
Securities Could Be At Greater Risk For Being Structurally Subordinated If Either We Or The Guarantor Convey, Transfer Or Lease
All Or Substantially All Of Our Or Its Assets To One Or More Of The Guarantor’s Subsidiaries.
Under the indenture,
we may convey, transfer or lease all or substantially all of our assets to one or more of the Guarantor’s subsidiaries. Similarly,
the Guarantor may convey, transfer or lease all or substantially all of its assets to one or more of its subsidiaries. In either
case, third-party creditors of the Guarantor’s subsidiaries would have additional assets from which to recover on their claims
while holders of the securities would be structurally subordinated to creditors of the Guarantor’s subsidiaries with respect
to such assets. See “Description of Debt Securities of Wells Fargo Finance LLC—Consolidation, Merger or Sale”
in the accompanying prospectus.
The Securities
Will Not Have The Benefit Of Any Cross-Default Or Cross-Acceleration With Other Indebtedness Of The Guarantor; Events Of Bankruptcy,
Insolvency, Receivership Or Liquidation Relating To The Guarantor And Failure By The Guarantor To Perform Any Of Its Covenants
Or Warranties (Other Than A Payment Default Under The Guarantee) Will Not Constitute An Event Of Default With Respect To The Securities.
The securities
will not have the benefit of any cross-default or cross-acceleration with other indebtedness of the Guarantor. In addition, events
of bankruptcy, insolvency, receivership or liquidation relating to the Guarantor and failure by the Guarantor to perform any of
its covenants or warranties (other than a payment default under the guarantee) will not constitute an event of default with respect
to the securities.
The Estimated Value Of The Securities On The Pricing
Date, Based On WFS’s Proprietary Pricing Models, Is Less Than The Original Offering Price.
The original offering price of the securities includes
certain costs that are borne by you. Because of these costs, the estimated value of the securities on the pricing date is less
than the original offering price. The costs included in the original offering price relate to selling, structuring, hedging and
issuing the securities, as well as to our funding considerations for debt of this type. The costs related to selling, structuring,
hedging and issuing the securities include (i) the agent discount (if any), (ii) the projected profit that our hedge counterparty
(which may be one of our affiliates) expects to realize for assuming risks inherent in hedging our obligations under the securities
and (iii) hedging and other costs relating to the offering of the securities. Our funding considerations are reflected in the fact
that we determine the economic terms of the securities based on an assumed rate that is generally lower than our internal funding
rate, which is described above under “Estimated Value of the Securities—Determining the estimated value.” If
the costs relating to selling, structuring, hedging and issuing the securities were lower, or if the assumed rate we use to determine
the economic terms of the securities were higher, the economic terms of the securities would be more favorable to you and the estimated
value would be higher.
The Estimated Value Of The Securities Is Determined
By Our Affiliate’s Pricing Models, Which May Differ From Those Of Other Dealers.
The estimated value of the securities was determined for
us by WFS using its proprietary pricing models and related market inputs and assumptions referred to above under “Estimated
Value of the Securities—Determining the estimated value.” Certain inputs to these models may be determined by WFS in
its discretion. WFS’s views on these inputs may differ from other dealers’ views, and WFS’s estimated value of
the securities may be higher, and perhaps materially higher, than the estimated value of the securities that would be determined
by other dealers in the market. WFS’s models and its inputs and related assumptions may prove to be wrong and therefore not
an accurate reflection of the value of the securities.
The Estimated Value Of The Securities Is Not An Indication
Of The Price, If Any, At Which WFS Or Any Other Person May Be Willing To Buy The Securities From You In The Secondary Market.
The price, if any, at which WFS or any of its affiliates
may purchase the securities in the secondary market will be based on WFS’s proprietary pricing models and will fluctuate
over the term of the securities as a result of changes in the market and other factors described in the next risk factor. Any such
secondary market price for the securities will also be reduced by a bid-offer spread, which may vary depending on the aggregate
face amount of the securities to be purchased in the secondary market transaction, and the expected cost of unwinding any related
hedging transactions. Unless the factors described in the next risk factor change significantly in your favor, any such secondary
market price for the securities is likely to be less than the original offering price.
If WFS or any of its affiliates makes a secondary market
in the securities at any time up to the issue date or during the 3-month period following the issue date, the secondary market
price offered by WFS or any of its affiliates will be increased by an amount reflecting a portion of the costs associated with
selling, structuring, hedging and issuing the securities that are included in the original offering price. Because this portion
of the costs is not fully deducted upon issuance, any secondary market price offered by WFS or any of its affiliates during this
period will be higher than it would be if it were based solely on WFS’s proprietary pricing models less the bid-offer spread
and hedging unwind costs described above. The amount of this increase in the secondary market price will decline steadily to zero
over this 3-month period. If you hold the securities through an account at WFS or any of its affiliates, we expect that this increase
will also be reflected in the value indicated for the securities on your brokerage account statement. If you hold your securities
through
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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an account at a broker-dealer other than WFS or any of its affiliates, the value of the securities on your brokerage account
statement may be different than if you held your securities at WFS or any of its affiliates, as discussed above under “Estimated
Value of the Securities—Valuation of the securities after issuance.”
The Value Of The Securities Prior To Stated Maturity
Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways.
The value of the securities prior to stated maturity will
be affected by the then-current level of the Index, interest rates at that time and a number of other factors, some of which are
interrelated in complex ways. The effect of any one factor may be offset or magnified by the effect of another factor. The following
factors, which we refer to as the “derivative component factors,” are expected to affect the value of the securities.
When we refer to the “value” of your security, we mean the value you could receive for your security if you
are able to sell it in the open market before the stated maturity date.
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Index Performance. The value of
the securities prior to maturity will depend substantially on the then-current level of the Index. The price at which you may be
able to sell the securities before stated maturity may be at a discount, which could be substantial, from their original offering
price, if the level of the Index at such time is less than, equal to or not sufficiently above the starting level or threshold
level.
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Interest Rates. The value of the
securities may be affected by changes in the interest rates in the U.S. markets.
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Volatility Of The Index. Volatility
is the term used to describe the size and frequency of market fluctuations. The value of the securities may be affected if the
volatility of the Index changes.
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Time Remaining To Maturity. The
value of the securities at any given time prior to maturity will likely be different from that which would be expected based on
the then-current level of the Index. This difference will most likely reflect a discount due to expectations and uncertainty concerning
the level of the Index during the period of time still remaining to the stated maturity date. In general, as the time remaining
to maturity decreases, the value of the securities will approach the amount that would be payable at maturity based on the then-current
level of the Index.
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Dividend Yields On Securities Included
In The Index. The value of the securities may be affected by the dividend yields on securities included in the Index.
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In addition to the derivative component factors, the value
of the securities will be affected by actual or anticipated changes in our and the Guarantor’s creditworthiness. You should
understand that the impact of one of the factors specified above, such as a change in interest rates, may offset some or all of
any change in the value of the securities attributable to another factor, such as a change in the level of the Index. Because numerous
factors are expected to affect the value of the securities, changes in the level of the Index may not result in a comparable change
in the value of the securities. We anticipate that the value of the securities will always be at a discount to the original offering
price plus the maximum return.
The Securities Will Not Be Listed On Any Securities
Exchange And We Do Not Expect A Trading Market For The Securities To Develop.
The securities will not be listed or displayed on any
securities exchange or any automated quotation system. Although the agent and/or its affiliates may purchase the securities from
holders, they are not obligated to do so and are not required to make a market for the securities. There can be no assurance that
a secondary market will develop. Because we do not expect that any market makers will participate in a secondary market for the
securities, the price at which you may be able to sell your securities is likely to depend on the price, if any, at which the agent
is willing to buy your securities. If a secondary market does exist, it may be limited. Accordingly, there may be a limited number
of buyers if you decide to sell your securities prior to stated maturity. This may affect the price you receive upon such sale.
Consequently, you should be willing to hold the securities to stated maturity.
Your Return On The Securities Could Be Less Than
If You Owned Securities Included In The Index.
Your return on the securities will not reflect the return
you would realize if you actually owned the securities included in the Index and received the dividends and other payments paid
on those securities. This is in part because the maturity payment amount will be determined by reference to the ending level of
the Index, which will be calculated by reference to the prices of the securities in the Index without taking into consideration
the value of dividends and other payments paid on those securities. In addition, the maturity payment amount will not be greater
than the original offering price plus the maximum return.
Historical Levels Of The Index Should Not Be Taken
As An Indication Of The Future Performance Of The Index During The Term Of The Securities.
The trading prices of the securities included in the
Index will determine the maturity payment amount payable to you at maturity. As a result, it is impossible to predict whether the
closing level of the Index will fall or rise compared to its starting level. Trading prices of the securities included in the Index
will be influenced by complex and interrelated political, economic, financial and other factors that can affect the markets in
which those securities are traded and the values of those securities themselves. Accordingly, any historical levels of the Index
do not provide an indication of the future performance of the Index.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Changes That Affect The Index May Adversely Affect
The Value Of The Securities And The Maturity Payment Amount You Will Receive At Maturity.
The policies of the index sponsor concerning the calculation
of the Index and the addition, deletion or substitution of securities comprising the Index and the manner in which the index sponsor
takes account of certain changes affecting such securities may affect the level of the Index and, therefore, may affect the value
of the securities and the maturity payment amount payable at maturity. The index sponsor may discontinue or suspend calculation
or dissemination of the Index or materially alter the methodology by which it calculates the Index. Any such actions could adversely
affect the value of the securities.
We Cannot Control Actions By Any Of The Unaffiliated
Companies Whose Securities Are Included In The Index.
Actions by any company whose securities are included
in the Index may have an adverse effect on the price of its security, the ending level and the value of the securities. Our parent
company, Wells Fargo & Company, is currently one of the companies included in the Index, but neither we nor the Guarantor are
affiliated with any of the other companies included in the Index. These unaffiliated companies included in the Index will not be
involved in the offering of the securities and will have no obligations with respect to the securities, including any obligation
to take our or your interests into consideration for any reason. These companies will not receive any of the proceeds of the offering
of the securities and will not be responsible for, and will not have participated in, the determination of the timing of, prices
for, or quantities of, the securities to be issued. These companies will not be involved with the administration, marketing or
trading of the securities and will have no obligations with respect to any amounts to be paid to you on the securities.
We And Our Affiliates Have No Affiliation With The
Index Sponsor And Have Not Independently Verified Its Public Disclosure Of Information.
We and our affiliates are not affiliated in any way
with the index sponsor and have no ability to control or predict its actions, including any errors in or discontinuation of disclosure
regarding the methods or policies relating to the calculation of the Index. We have derived the information about the index sponsor
and the Index contained in this pricing supplement and the accompanying market measure supplement from publicly available information,
without independent verification. You, as an investor in the securities, should make your own investigation into the Index and
the index sponsor. The index sponsor is not involved in the offering of the securities made hereby in any way and has no obligation
to consider your interests as an owner of the securities in taking any actions that might affect the value of the securities.
The Stated Maturity Date May Be Postponed If The
Calculation Day Is Postponed.
The calculation day will be postponed if the originally
scheduled calculation day is not a trading day or if the calculation agent determines that a market disruption event has occurred
or is continuing on the calculation day. If such a postponement occurs, the stated maturity date will be the later of (i) the initial
stated maturity date and (ii) three business days after the calculation day as postponed.
Our And The Guarantor’s Economic Interests And Those
Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests.
You should be aware of the following ways in which our
and the Guarantor’s economic interests and those of any dealer participating in the distribution of the securities, which
we refer to as a “participating dealer,” are potentially adverse to your interests as an investor in the securities.
In engaging in certain of the activities described below, our affiliates or any participating dealer or its affiliates may take
actions that may adversely affect the value of and your return on the securities, and in so doing they will have no obligation
to consider your interests as an investor in the securities. Our affiliates or any participating dealer or its affiliates may realize
a profit from these activities even if investors do not receive a favorable investment return on the securities.
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•
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The calculation agent is our affiliate and may be
required to make discretionary judgments that affect the return you receive on the securities. WFS, which is our affiliate,
will be the calculation agent for the securities. As calculation agent, WFS will determine the ending level of the Index and may
be required to make other determinations that affect the return you receive on the securities at maturity. In making these determinations,
the calculation agent may be required to make discretionary judgments, including determining whether a market disruption event
has occurred on the scheduled calculation day, which may result in postponement of the calculation day; determining the ending
level of the Index if the calculation day is postponed to the last day to which it may be postponed and a market disruption event
occurs on that day; if the Index is discontinued, selecting a successor equity index or, if no successor equity index is available,
determining the ending level of the Index; and determining whether to adjust the ending level of the Index on the calculation day
in the event of certain changes in or modifications to the Index. In making these discretionary judgments, the fact that WFS is
our affiliate may cause it to have economic interests that are adverse to your interests as an investor in the securities, and
WFS’s determinations as calculation agent may adversely affect your return on the securities.
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•
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The estimated value of the securities was calculated
by our affiliate and is therefore not an independent third-party valuation. WFS calculated the estimated value of the securities
set forth on the cover page of this pricing supplement, which involved discretionary judgments by WFS, as described under “Risk
Factors—The Estimated Value Of The Securities Is Determined By Our Affiliate’s Pricing Models, Which May Differ From
Those Of Other Dealers” above. Accordingly, the estimated value of the securities set forth on the cover page of this pricing
supplement is not an independent third-party valuation.
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|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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•
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Research reports by our affiliates or any participating
dealer or its affiliates may be inconsistent with an investment in the securities and may adversely affect the level of the Index.
Our affiliates or any participating dealer in the offering of the securities or its affiliates may, at present or in the
future, publish research reports on the Index or the companies whose securities are included in the Index. This research is modified
from time to time without notice and may, at present or in the future, express opinions or provide recommendations that are inconsistent
with purchasing or holding the securities. Any research reports on the Index or the companies whose securities are included in
the Index could adversely affect the level of the Index and, therefore, adversely affect the value of and your return on the securities.
You are encouraged to derive information concerning the Index from multiple sources and should not rely on the views expressed
by us or our affiliates or any participating dealer or its affiliates. In addition, any research reports on the Index or the companies
whose securities are included in the Index published on or prior to the pricing date could result in an increase in the level of
the Index on the pricing date, which would adversely affect investors in the securities by increasing the level at which the Index
must close on the calculation day in order for investors in the securities to receive a favorable return.
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•
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Business activities of our affiliates or any participating
dealer or its affiliates with the companies whose securities are included in the Index may adversely affect the level of the Index.
Our affiliates or any participating dealer or its affiliates may, at present or in the future, engage in business with
the companies whose securities are included in the Index, including making loans to those companies (including exercising creditors’
remedies with respect to such loans), making equity investments in those companies or providing investment banking, asset management
or other advisory services to those companies. These business activities could adversely affect the level of the Index and, therefore,
adversely affect the value of and your return on the securities. In addition, in the course of these business activities, our affiliates
or any participating dealer or its affiliates may acquire non-public information about one or more of the companies whose securities
are included in the Index. If our affiliates or any participating dealer or its affiliates do acquire such non-public information,
we and they are not obligated to disclose such non-public information to you.
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•
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Hedging activities by our affiliates or any participating
dealer or its affiliates may adversely affect the level of the Index. We expect to hedge our obligations under the securities
through one or more hedge counterparties, which may include our affiliates or any participating dealer or its affiliates. Pursuant
to such hedging activities, our hedge counterparties may acquire securities included in the Index or listed or over-the-counter
derivative or synthetic instruments related to the Index or such securities. Depending on, among other things, future market conditions,
the aggregate amount and the composition of such positions are likely to vary over time. To the extent that our hedge counterparties
have a long hedge position in any of the securities included in the Index, or derivative or synthetic instruments related to the
Index or such securities, they may liquidate a portion of such holdings at or about the time of the calculation day or at or about
the time of a change in the securities included in the Index. These hedging activities could potentially adversely affect the level
of the Index and, therefore, adversely affect the value of and your return on the securities.
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•
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Trading activities by our affiliates or any participating
dealer or its affiliates may adversely affect the level of the Index. Our affiliates or any participating dealer or its
affiliates may engage in trading in the securities included in the Index and other instruments relating to the Index or such securities
on a regular basis as part of their general broker-dealer and other businesses. Any of these trading activities could potentially
adversely affect the level of the Index and, therefore, adversely affect the value of and your return on the securities.
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•
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A participating dealer or its affiliates may realize
hedging profits projected by its proprietary pricing models in addition to any selling concession and/or distribution expense fee,
creating a further incentive for the participating dealer to sell the securities to you. If any participating dealer or
any of its affiliates conducts hedging activities for us in connection with the securities, that participating dealer or its affiliates
will expect to realize a projected profit from such hedging activities. If a participating dealer receives a concession and/or
distribution expense fee for the sale of the securities to you, this projected hedging profit will be in addition to the concession
and/or distribution expense fee, creating a further incentive for the participating dealer to sell the securities to you.
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The U.S. Federal Tax Consequences Of An Investment In The
Securities Are Unclear.
There is no direct legal authority regarding the proper
U.S. federal tax treatment of the securities, and we do not plan to request a ruling from the IRS. Consequently, significant aspects
of the tax treatment of the securities are uncertain, and the IRS or a court might not agree with the treatment of the securities
as prepaid derivative contracts that are “open transactions” for U.S. federal income tax purposes. If the IRS were
successful in asserting an alternative treatment of the securities, the tax consequences of the ownership and disposition of the
securities might be materially and adversely affected.
Section 871(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), imposes a withholding tax of up to 30% on “dividend equivalents” paid or deemed
paid to non-U.S. investors in respect of certain financial instruments linked to U.S. equities. In light of Treasury regulations,
as modified by an IRS notice, that provide a general exemption for financial instruments issued prior to January 1, 2021 that do
not have a “delta” of one, the securities should not be subject to withholding under Section 871(m). However, the IRS
could challenge this conclusion. If withholding applies to the securities, we will not be required to pay any additional amounts
with respect to amounts withheld.
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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In addition, in 2007 the U.S. Treasury Department and
the IRS released a notice requesting comments on various issues regarding the U.S. federal income tax treatment of “prepaid
forward contracts” and similar instruments. Any Treasury regulations or other guidance promulgated after consideration of
these issues could materially and adversely affect the tax consequences of an investment in the securities, including the character
and timing of income or loss and the degree, if any, to which income realized by non-U.S. persons should be subject to withholding
tax, possibly with retroactive effect. You should read carefully the discussion under “United States Federal Tax Considerations”
in this pricing supplement. You should also consult your tax adviser regarding the U.S. federal tax consequences of an investment
in the securities, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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The following table illustrates, for a range of hypothetical
ending levels of the Index:
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•
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the hypothetical percentage change from the hypothetical starting level to the hypothetical ending
level;
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•
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the hypothetical maturity payment amount payable at stated maturity per security; and
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•
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the hypothetical pre-tax total rate of return.
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Hypothetical
ending level
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Hypothetical
percentage change
from the hypothetical
starting level to the
hypothetical ending level
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Hypothetical
maturity payment
amount
payable at
stated maturity
per security
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Hypothetical
pre-tax total
rate of return
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175.00
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75.00%
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$1,120.00
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12.00%
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150.00
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50.00%
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$1,120.00
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12.00%
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140.00
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40.00%
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$1,120.00
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12.00%
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130.00
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30.00%
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$1,120.00
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12.00%
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120.00
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20.00%
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$1,120.00
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12.00%
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110.00
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10.00%
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$1,120.00
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12.00%
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109.60
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9.60%
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$1,120.00
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12.00%
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105.00
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5.00%
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$1,062.50
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6.25%
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100.00(1)
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0.00%
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$1,000.00
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0.00%
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95.00
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-5.00%
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$1,000.00
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0.00%
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90.00
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-10.00%
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$1,000.00
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0.00%
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85.00
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-15.00%
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$1,000.00
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0.00%
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84.00
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-16.00%
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$990.00
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-1.00%
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80.00
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-20.00%
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$950.00
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-5.00%
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75.00
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-25.00%
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$900.00
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-10.00%
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50.00
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-50.00%
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$650.00
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-35.00%
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25.00
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-75.00%
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$400.00
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-60.00%
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(1)
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The hypothetical starting level of 100.00 has been chosen for illustrative purposes only and does
not represent the actual starting level. The actual starting level is set forth under “Terms of the Securities” above.
For historical data regarding the actual closing levels of the Index, see the historical information set forth herein.
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The above figures are for purposes of illustration only
and may have been rounded for ease of analysis. The actual amount you receive at stated maturity and the resulting pre-tax rate
of return will depend on the actual starting level and ending level.
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Hypothetical Payments at Stated Maturity
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Set forth below are four examples of payment at stated
maturity calculations, assuming hypothetical starting levels and ending levels as indicated in the examples. The terms used for
purposes of these hypothetical examples do not represent the actual starting level or threshold level. The hypothetical starting
level of 100.00 has been chosen for illustrative purposes only and does not represent the actual starting level. The actual starting
level and threshold level are set forth under “Terms of the Securities” above. For historical data regarding the actual
closing levels of the Index, see the historical information set forth herein. These examples are for purposes of illustration only
and the values used in the examples may have been rounded for ease of analysis.
Example 1. Maturity payment amount is greater
than the original offering price and reflects a return that is less than the maximum return:
Hypothetical starting level: 100.00
Hypothetical ending level: 105.00
Because the hypothetical ending level is greater than the hypothetical starting level, the maturity payment amount per security
would be equal to the original offering price of $1,000 plus a positive return equal to the lesser of:
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(i)
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$1,000
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×
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105.00 – 100.00
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× 125%
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= $62.50;
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and
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100.00
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(ii) the maximum return of $120.00
On the stated maturity date you would receive $1,062.50
per security.
Example 2. Maturity payment amount is greater
than the original offering price and reflects a return equal to the maximum return:
Hypothetical starting level: 100.00
Hypothetical ending level: 150.00
Because the hypothetical ending level is greater
than the hypothetical starting level, the maturity payment amount per security would be equal to the original offering price of
$1,000 plus a positive return equal to the lesser of:
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(i)
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$1,000
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×
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150.00
– 100.00
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× 125%
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= $625.00;
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and
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100.00
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(ii) the maximum return of $120.00
On the stated maturity date you would receive $1,120.00
per security, which is the maximum maturity payment amount.
In addition to limiting your return on the securities,
the maximum return limits the positive effect of the participation rate. If the ending level is greater than the starting level,
you will participate in the performance of the Index at a rate of 125% up to a certain point. However, the effect of the participation
rate will be progressively reduced for ending levels that are greater than 109.60% of the starting level since your return on the
securities for any ending level greater than 109.60% of the starting level will be limited to the maximum return.
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
|
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Example 3. Maturity payment amount is equal to the original
offering price:
Hypothetical starting level: 100.00
Hypothetical ending level: 90.00
Hypothetical threshold level: 85.00, which is 85.00%
of the hypothetical starting level
Since the hypothetical ending level is less than
the hypothetical starting level, but not by more than 15%, you would not lose any of the original offering price of your securities.
On the stated maturity date you would receive $1,000.00
per security.
Example 4. Maturity payment amount is less than the
original offering price:
Hypothetical starting level: 100.00
Hypothetical ending level: 50.00
Hypothetical threshold level: 85.00, which is 85%
of the hypothetical starting level
Since the hypothetical ending level is less than
the hypothetical starting level by more than 15%, you would lose a portion of the original offering price of your securities and
receive the maturity payment amount equal to:
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$1,000 -
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$1,000
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×
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85.00 – 50.00
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= $650.00
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100.00
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On the stated maturity date you would receive $650.00
per security.
To the extent that the starting level and ending level
differ from the values assumed above, the results indicated above would be different.
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
|
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Additional Terms of the Securities
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Wells Fargo Finance LLC will issue the securities as part
of a series of senior unsecured debt securities entitled “Medium-Term Notes, Series A,” which is more fully described
in the prospectus supplement. Information included in this pricing supplement supersedes information in the market measure supplement,
prospectus supplement and prospectus to the extent that it is different from that information.
Certain Definitions
A “trading day” means a day, as determined
by the calculation agent, on which (i) the relevant stock exchanges with respect to each security underlying the Index are scheduled
to be open for trading for their respective regular trading sessions and (ii) each related futures or options exchange is scheduled
to be open for trading for its regular trading session.
The “relevant stock exchange” for any
security underlying the Index means the primary exchange or quotation system on which such security is traded, as determined by
the calculation agent.
The “related futures or options exchange”
for the Index means an exchange or quotation system where trading has a material effect (as determined by the calculation agent)
on the overall market for futures or options contracts relating to the Index.
Calculation Agent
Wells Fargo Securities, LLC, one of our affiliates and
a wholly owned subsidiary of Wells Fargo & Company, will act as calculation agent for the securities and may appoint agents
to assist it in the performance of its duties. Pursuant to a calculation agent agreement, we may appoint a different calculation
agent without your consent and without notifying you.
The calculation agent will determine the maturity payment
amount you receive at stated maturity. In addition, the calculation agent will, among other things:
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•
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determine whether a market disruption
event has occurred;
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•
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determine the closing level of the Index
under certain circumstances;
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•
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determine if adjustments are required
to the closing level of the Index under various circumstances; and
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•
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if publication of the Index is discontinued,
select a successor equity index (as defined below) or, if no successor equity index is available, determine the closing level of
the Index.
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All determinations made by the calculation agent will
be at the sole discretion of the calculation agent and, in the absence of manifest error, will be conclusive for all purposes and
binding on us and you. The calculation agent will have no liability for its determinations.
Market Disruption Events
A “market disruption event” means any
of the following events as determined by the calculation agent in its sole discretion:
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(A)
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The occurrence or existence of a material
suspension of or limitation imposed on trading by the relevant stock exchanges or otherwise relating to securities which then comprise
20% or more of the level of the Index or any successor equity index at any time during the one-hour period that ends at the close
of trading on that day, whether by reason of movements in price exceeding limits permitted by those relevant stock exchanges or
otherwise.
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(B)
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The occurrence or existence of a material
suspension of or limitation imposed on trading by any related futures or options exchange or otherwise in futures or options contracts
relating to the Index or any successor equity index on any related futures or options exchange at any time during the one-hour
period that ends at the close of trading on that day, whether by reason of movements in price exceeding limits permitted by the
related futures or options exchange or otherwise.
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(C)
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The occurrence or existence of any event,
other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions
in, or obtain market values for, securities that then comprise 20% or more of the level of the Index or any successor equity index
on their relevant stock exchanges at any time during the one-hour period that ends at the close of trading on that day.
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(D)
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The occurrence or existence of any event,
other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions
in, or obtain market values for, futures or options contracts relating to the Index or any successor equity index on any related
futures or options exchange at any time during the one-hour period that ends at the close of trading on that day.
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(E)
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The closure on any exchange business day
of the relevant stock exchanges on which securities that then comprise 20% or more of the level of the Index or any successor equity
index are traded or any related futures or options exchange prior to its scheduled closing time unless the earlier closing time
is announced by the relevant stock exchange or related futures or options exchange, as applicable, at least one hour prior to the
earlier of (1) the actual closing time for the regular trading
|
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
|
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session
on such relevant stock exchange or related futures or options exchange, as applicable,
and (2) the submission deadline for orders to be entered into the relevant stock exchange
or related futures or options exchange, as applicable, system for execution at such actual
closing time on that day.
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(F)
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The relevant stock exchange for any security
underlying the Index or successor equity index or any related futures or options exchange fails to open for trading during its
regular trading session.
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For purposes of determining whether a market disruption
event has occurred:
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(1)
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the relevant percentage contribution of a security to the level of the Index or any successor equity
index will be based on a comparison of (x) the portion of the level of such index attributable to that security and (y) the overall
level of the Index or successor equity index, in each case immediately before the occurrence of the market disruption event;
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(2)
|
the “close of trading” on any trading day for the Index or any successor equity
index means the scheduled closing time of the relevant stock exchanges with respect to the securities underlying the Index or successor
equity index on such trading day; provided that, if the actual closing time of the regular trading session of any such relevant
stock exchange is earlier than its scheduled closing time on such trading day, then (x) for purposes of clauses (A) and (C) of
the definition of “market disruption event” above, with respect to any security underlying the Index or successor equity
index for which such relevant stock exchange is its relevant stock exchange, the “close of trading” means such actual
closing time and (y) for purposes of clauses (B) and (D) of the definition of “market disruption event” above, with
respect to any futures or options contract relating to the Index or successor equity index, the “close of trading”
means the latest actual closing time of the regular trading session of any of the relevant stock exchanges, but in no event later
than the scheduled closing time of the relevant stock exchanges;
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(3)
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the “scheduled closing time” of any relevant stock exchange or related futures
or options exchange on any trading day for the Index or any successor equity index means the scheduled weekday closing time of
such relevant stock exchange or related futures or options exchange on such trading day, without regard to after hours or any other
trading outside the regular trading session hours; and
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(4)
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an “exchange business day” means any trading day for the Index or any successor
equity index on which each relevant stock exchange for the securities underlying the Index or any successor equity index and each
related futures or options exchange are open for trading during their respective regular trading sessions, notwithstanding any
such relevant stock exchange or related futures or options exchange closing prior to its scheduled closing time.
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If a market disruption event occurs or is continuing on
the calculation day, then the calculation day will be postponed to the first succeeding trading day on which a market disruption
event has not occurred and is not continuing; however, if such first succeeding trading day has not occurred as of the eighth trading
day after the originally scheduled calculation day, that eighth trading day shall be deemed to be the calculation day. If the calculation
day has been postponed eight trading days after the originally scheduled calculation day and a market disruption event occurs or
is continuing on such eighth trading day, the calculation agent will determine the closing level of the Index on such eighth trading
day in accordance with the formula for and method of calculating the closing level of the Index last in effect prior to commencement
of the market disruption event, using the closing price (or, with respect to any relevant security, if a market disruption event
has occurred with respect to such security, its good faith estimate of the value of such security at the scheduled closing time
of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular trading session of such
relevant stock exchange) on such date of each security included in the Index. As used herein, “closing price”
means, with respect to any security on any date, the relevant stock exchange traded or quoted price of such security as of the
scheduled closing time of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular
trading session of such relevant stock exchange.
Adjustments to the Index
If at any time the method of calculating the Index or
a successor equity index, or the closing level thereof, is changed in a material respect, or if the Index or a successor equity
index is in any other way modified so that such index does not, in the opinion of the calculation agent, fairly represent the level
of such index had those changes or modifications not been made, then the calculation agent will, at the close of business in New
York, New York, on each date that the closing level of such index is to be calculated, make such calculations and adjustments as,
in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of an index comparable to the
Index or successor equity index as if those changes or modifications had not been made, and the calculation agent will calculate
the closing level of the Index or successor equity index with reference to such index, as so adjusted. Accordingly, if the method
of calculating the Index or successor equity index is modified so that the level of such index is a fraction or a multiple of what
it would have been if it had not been modified (e.g., due to a split or reverse split in such equity index), then the calculation
agent will adjust the Index or successor equity index in order to arrive at a level of such index as if it had not been modified
(e.g., as if the split or reverse split had not occurred).
Discontinuance of the Index
If the sponsor or publisher of the Index (the “index
sponsor”) discontinues publication of the Index, and such index sponsor or another entity publishes a successor or substitute
equity index that the calculation agent determines, in its sole discretion, to be comparable to the Index (a “successor
equity index”), then, upon the calculation agent’s notification of that determination to the trustee and Wells
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
|
|
Fargo Finance LLC, the calculation agent will substitute the successor equity index as calculated by the relevant index sponsor
or any other entity and calculate the ending level as described above. Upon any selection by the calculation agent of a successor
equity index, Wells Fargo Finance LLC will cause notice to be given to holders of the securities.
In the event that the index sponsor discontinues publication
of the Index prior to, and the discontinuance is continuing on, the calculation day and the calculation agent determines that no
successor equity index is available at such time, the calculation agent will calculate a substitute closing level for the Index
in accordance with the formula for and method of calculating the Index last in effect prior to the discontinuance, but using only
those securities that comprised the Index immediately prior to that discontinuance. If a successor equity index is selected or
the calculation agent calculates a level as a substitute for the Index, the successor equity index or level will be used as a substitute
for the Index for all purposes, including the purpose of determining whether a market disruption event exists.
If on the calculation day the index sponsor fails to calculate
and announce the level of the Index, the calculation agent will calculate a substitute closing level of the Index in accordance
with the formula for and method of calculating the Index last in effect prior to the failure, but using only those securities that
comprised the Index immediately prior to that failure; provided that, if a market disruption event occurs or is continuing
on such day, then the provisions set forth above under “—Market Disruption Events” shall apply in lieu of the
foregoing.
Notwithstanding these alternative arrangements, discontinuance
of the publication of, or the failure by the index sponsor to calculate and announce the level of, the Index may adversely affect
the value of the securities.
Events of Default and Acceleration
If an event of default with respect to the securities
has occurred and is continuing, the amount payable to a holder of a security upon any acceleration permitted by the securities,
with respect to each security, will be equal to the maturity payment amount, calculated as provided herein. The maturity payment
amount will be calculated as though the date of acceleration were the calculation day.
|
Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
|
|
The S&P 500 Index is an equity index that is intended to
provide an indication of the pattern of common stock price movement in the large capitalization segment of the United States equity
market. Our parent company, Wells Fargo & Company is one of the companies currently included in the S&P 500 Index. See
“Description of Equity Indices—The S&P Indices” in the accompanying market measure supplement for additional
information about the S&P 500 Index. Effective February 20, 2019, to be added to the S&P 500® Index a company
must have an unadjusted company market capitalization of $8.2 billion or more (an increase from the previous requirement of an
unadjusted company market capitalization of $6.1 billion or more). A company meeting the unadjusted company market capitalization
criteria is also required to have a security level float-adjusted market capitalization that is at least $4.1 billion.
In addition, information about the S&P 500 Index may be
obtained from other sources including, but not limited to, the S&P 500 Index sponsor’s website (including information
regarding the S&P 500 Index’s sector weightings). We are not incorporating by reference into this pricing supplement
the website or any material it includes. Neither we nor the agent makes any representation that such publicly available information
regarding the S&P 500 Index is accurate or complete.
Historical Information
We obtained the closing levels of the S&P 500 Index
in the graph below from Bloomberg Financial Markets, without independent verification.
The following graph sets forth daily closing levels of
the Index for the period from January 1, 2014 to October 31, 2019. The closing level on October 31, 2019 was 3037.56. The historical
performance of the Index should not be taken as an indication of the future performance of the Index during the term of the securities.
The S&P 500® Index is a product of
S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed to Wells Fargo & Company (“WFC”),
our parent company, for use by WFC and certain of its affiliated or subsidiary companies (including us). Standard & Poor’s®,
S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services
LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow
Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by WFC. The securities
are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties
make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors,
omissions, or interruptions of the S&P 500® Index.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Benefit Plan Investor Considerations
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Each fiduciary of a pension, profit-sharing or other employee
benefit plan to which Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) applies (a “plan”),
should consider the fiduciary standards of ERISA in the context of the plan’s particular circumstances before authorizing
an investment in the securities. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy
the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the
plan. When we use the term “holder” in this section, we are referring to a beneficial owner of the securities
and not the record holder.
Section 406 of ERISA and Section 4975 of the
Code prohibit plans, as well as individual retirement accounts and Keogh plans to which Section 4975 of the Code applies (also
“plans”), from engaging in specified transactions involving “plan assets” with persons who are “parties
in interest” under ERISA or “disqualified persons” under the Code (collectively, “parties in interest”)
with respect to such plan. A violation of those “prohibited transaction” rules may result in an excise tax or other
liabilities under ERISA and/or Section 4975 of the Code for such persons, unless statutory or administrative exemptive relief
is available. Therefore, a fiduciary of a plan should also consider whether an investment in the securities might constitute or
give rise to a prohibited transaction under ERISA and the Code.
Employee benefit plans that are governmental plans, as
defined in Section 3(32) of ERISA, certain church plans, as defined in Section 3(33) of ERISA, and foreign plans, as
described in Section 4(b)(4) of ERISA (collectively, “Non-ERISA Arrangements”), are not subject to the
requirements of ERISA, or Section 4975 of the Code, but may be subject to similar rules under other applicable laws or regulations
(“Similar Laws”).
We and our affiliates may each be considered a party in
interest with respect to many plans. Special caution should be exercised, therefore, before the securities are purchased by a plan.
In particular, the fiduciary of the plan should consider whether statutory or administrative exemptive relief is available. The
U.S. Department of Labor has issued five prohibited transaction class exemptions (“PTCEs”) that may provide
exemptive relief for direct or indirect prohibited transactions resulting from the purchase or holding of the securities. Those
class exemptions are:
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PTCE 96-23, for specified transactions
determined by in-house asset managers;
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PTCE 95-60, for specified transactions
involving insurance company general accounts;
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PTCE 91-38, for specified transactions
involving bank collective investment funds;
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PTCE 90-1, for specified transactions
involving insurance company separate accounts; and
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PTCE 84-14, for specified transactions
determined by independent qualified professional asset managers.
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In addition, Section 408(b)(17) of ERISA and Section
4975(d)(20) of the Code provide an exemption for transactions between a plan and a person who is a party in interest (other than
a fiduciary who has or exercises any discretionary authority or control with respect to investment of the plan assets involved
in the transaction or renders investment advice with respect thereto) solely by reason of providing services to the plan (or by
reason of a relationship to such a service provider), if in connection with the transaction of the plan receives no less, and pays
no more, than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA).
Any purchaser or holder of the securities or any interest
in the securities will be deemed to have represented by its purchase and holding that either:
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no portion of the
assets used by such purchaser or holder to acquire or purchase the securities constitutes assets of any plan or Non-ERISA Arrangement;
or
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the purchase and
holding of the securities by such purchaser or holder will not constitute a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code or similar violation under any Similar Laws.
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Due to the complexity of these rules and the penalties
that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries
or other persons considering purchasing the securities on behalf of or with “plan assets” of any plan consult with
their counsel regarding the potential consequences under ERISA and the Code of the acquisition of the securities and the availability
of exemptive relief.
The securities are contractual financial instruments.
The financial exposure provided by the securities is not a substitute or proxy for, and is not intended as a substitute or proxy
for, individualized investment management or advice for the benefit of any purchaser or holder of the securities. The securities
have not been designed and will not be administered in a manner intended to reflect the individualized needs and objectives of
any purchaser or holder of the securities.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Each purchaser or holder of the securities acknowledges
and agrees that:
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(i)
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the purchaser or holder or its fiduciary has made and shall
make all investment decisions for the purchaser or holder and the purchaser or holder has not relied and shall not rely in any
way upon us or our affiliates to act as a fiduciary or adviser of the purchaser or holder with respect to (a) the design and terms
of the securities, (b) the purchaser or holder’s investment in the securities, or (c) the exercise of or failure to exercise
any rights we have under or with respect to the securities;
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(ii)
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we and our affiliates have acted and will act solely for
our own account in connection with (a) all transactions relating to the securities and (b) all hedging transactions in connection
with our obligations under the securities;
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(iii)
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any and all assets and positions relating to hedging transactions
by us or our affiliates are assets and positions of those entities and are not assets and positions held for the benefit of the
purchaser or holder;
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(iv)
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our interests may be adverse to the interests of the purchaser
or holder; and
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(v)
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neither we nor any of our affiliates is a fiduciary or
adviser of the purchaser or holder in connection with any such assets, positions or transactions, and any information that we
or any of our affiliates may provide is not intended to be impartial investment advice.
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Purchasers of the securities have the exclusive responsibility
for ensuring that their purchase, holding and subsequent disposition of the securities does not violate the fiduciary or prohibited
transaction rules of ERISA, the Code or any Similar Law. Nothing herein shall be construed as a representation that an investment
in the securities would be appropriate for, or would meet any or all of the relevant legal requirements with respect to investments
by, plans or Non-ERISA Arrangements generally or any particular plan or Non-ERISA Arrangement.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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United States Federal Tax Considerations
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The following is a discussion of the material U.S.
federal income and certain estate tax consequences of the ownership and disposition of the securities. It applies to you only if
you purchase a security for cash in the initial offering at the “issue price,” which is the first price at which a
substantial amount of the securities is sold to the public, and hold the security as a capital asset within the meaning of Section
1221 of the Code. It does not address all of the tax consequences that may be relevant to you in light of your particular circumstances
or if you are an investor subject to special rules, such as:
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a financial institution;
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a “regulated investment company”;
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a tax-exempt entity, including an “individual
retirement account” or “Roth IRA”;
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a dealer or trader subject to a mark-to-market
method of tax accounting with respect to the securities;
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a person holding a security as part of
a “straddle” or conversion transaction or who has entered into a “constructive sale” with respect to a
security;
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a U.S. holder (as defined below) whose
functional currency is not the U.S. dollar; or
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an entity classified as a partnership
for U.S. federal income tax purposes.
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If an entity that is classified as a partnership for U.S. federal
income tax purposes holds the securities, the U.S. federal income tax treatment of a partner will generally depend on the status
of the partner and the activities of the partnership. If you are a partnership holding the securities or a partner in such a partnership,
you should consult your tax adviser as to your particular U.S. federal tax consequences of holding and disposing of the securities.
We will not attempt to ascertain whether any of the issuers of the underlying stocks of the Index (the “underlying stocks”)
is treated as a “U.S. real property holding corporation” (“USRPHC”) within the meaning of Section
897 of the Code or as a “passive foreign investment company” (“PFIC”) within the meaning of Section
1297 of the Code. If any of the issuers of the underlying stocks were so treated, certain adverse U.S. federal income tax consequences
might apply to you, in the case of a USRPHC if you are a non-U.S. holder (as defined below) and in the case of a PFIC if you are
a U.S. holder (as defined below), upon the sale, exchange or other disposition of the securities. You should refer to information
filed with the Securities and Exchange Commission or another governmental authority by the issuers of the underlying stocks and
consult your tax adviser regarding the possible consequences to you if any of the issuers of the underlying stocks is or becomes
a USRPHC or PFIC.
This discussion is based on the Code, administrative
pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date of this pricing supplement,
changes to any of which subsequent to the date of this pricing supplement may affect the tax consequences described herein, possibly
with retroactive effect. This discussion does not address the effects of any applicable state, local or non-U.S. tax laws, any
alternative minimum tax consequences, the potential application of the Medicare tax on investment income or the consequences to
taxpayers subject to special tax accounting rules under Section 451(b) of the Code. You should consult your tax adviser concerning
the application of U.S. federal income and estate tax laws to your particular situation (including the possibility of alternative
treatments of the securities), as well as any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction.
Tax Treatment of the Securities
In the opinion of our counsel, Davis Polk & Wardwell
LLP, which is based on current market conditions, a security should be treated as a prepaid derivative contract that is an “open
transaction” for U.S. federal income tax purposes. By purchasing a security, you agree (in the absence of an administrative
determination or judicial ruling to the contrary) to this treatment.
Due to the absence of statutory, judicial or administrative
authorities that directly address the U.S. federal tax treatment of the securities or similar instruments, significant aspects
of the treatment of an investment in the securities are uncertain. We do not plan to request a ruling from the IRS, and the IRS
or a court might not agree with the treatment described below. Accordingly, you should consult your tax adviser regarding all aspects
of the U.S. federal income and estate tax consequences of an investment in the securities. Unless otherwise indicated, the following
discussion is based on the treatment of the securities as prepaid derivative contracts that are “open transactions.”
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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Tax Consequences to U.S. Holders
This section applies only to U.S. holders. You are a
“U.S. holder” if you are a beneficial owner of a security that is, for U.S. federal income tax purposes:
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a citizen or individual resident of the
United States;
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a corporation created or organized in
or under the laws of the United States, any state therein or the District of Columbia; or
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an estate or trust the income of which
is subject to U.S. federal income taxation regardless of its source.
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Tax Treatment Prior to Maturity. You should not
be required to recognize income over the term of the securities prior to maturity, other than pursuant to a sale, exchange or retirement
as described below.
Sale, Exchange or Retirement of the Securities.
Upon a sale, exchange or retirement of the securities, you should recognize gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and your tax basis in the securities that are sold, exchanged or retired. Your tax
basis in the securities should equal the amount you paid to acquire them. This gain or loss should be long-term capital gain or
loss if at the time of the sale, exchange or retirement you held the securities for more than one year, and short-term capital
gain or loss otherwise. Long-term capital gains recognized by non-corporate U.S. holders are generally subject to taxation at reduced
rates. The deductibility of capital losses is subject to certain limitations.
Possible Alternative Tax Treatments of an Investment
in the Securities
Alternative U.S. federal income tax treatments of the
securities are possible that, if applied, could materially and adversely affect the timing and/or character of income, gain or
loss with respect to them. It is possible, for example, that the securities could be treated as debt instruments governed by Treasury
regulations relating to the taxation of contingent payment debt instruments. In that case, regardless of your method of tax accounting
for U.S. federal income tax purposes, you generally would be required to accrue income based on our comparable yield for similar
non-contingent debt, determined as of the time of issuance of the securities, in each year that you held the securities, even though
we are not required to make any payment with respect to the securities prior to maturity. In addition, any gain on the sale, exchange
or retirement of the securities would be treated as ordinary income.
Other possible U.S. federal income tax treatments of
the securities could also affect the timing and character of income or loss with respect to the securities. In 2007, the U.S. Treasury
Department and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward
contracts” and similar instruments. The notice focuses in particular on whether to require holders of these instruments to
accrue income over the term of their investment. It also asks for comments on a number of related topics, including the character
of income or loss with respect to these instruments; whether short-term instruments should be subject to any such accrual regime;
the relevance of factors such as the exchange-traded status of the instruments and the nature of the underlying property to which
the instruments are linked; and whether these instruments are or should be subject to the “constructive ownership”
regime, which very generally can operate to recharacterize certain long-term capital gain as ordinary income and impose a notional
interest charge. While the notice requests comments on appropriate transition rules and effective dates, any Treasury regulations
or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of
an investment in the securities, possibly with retroactive effect. You should consult your tax adviser regarding the possible alternative
treatments of an investment in the securities and the issues presented by this notice.
Tax Consequences to Non-U.S. Holders
This section applies only to non-U.S. holders. You are
a “non-U.S. holder” if you are a beneficial owner of a security that is, for U.S. federal income tax purposes:
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an individual who is classified as a nonresident
alien;
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a foreign corporation; or
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a foreign estate or trust.
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You are not a non-U.S. holder for purposes of this discussion
if you are (i) an individual who is present in the United States for 183 days or more in the taxable year of disposition or (ii)
a former citizen or resident of the United States. If you are or may become such a person during the period in which you hold a
security, you should consult your tax adviser regarding the U.S. federal tax consequences of an investment in the securities.
Sale, Exchange or Retirement of the Securities. Subject
to the possible application of Section 897 of the Code and the discussion below regarding Section 871(m), you generally should
not be subject to U.S. federal income or withholding tax in respect of amounts paid to
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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you, provided that income in respect of
the securities is not effectively connected with your conduct of a trade or business in the United States.
If you are engaged in a U.S. trade or business, and if income
from the securities is effectively connected with the conduct of that trade or business, you generally will be subject to regular
U.S. federal income tax with respect to that income in the same manner as if you were a U.S. holder, unless an applicable income
tax treaty provides otherwise. If you are such a holder and you are a corporation, you should also consider the potential application
of a 30% (or lower treaty rate) branch profits tax.
Tax Consequences Under Possible Alternative Treatments.
If all or any portion of a security were recharacterized as a debt instrument, subject to the possible application of Section 897
of the Code and the discussions below regarding FATCA and Section 871(m), any payment made to you with respect to the security
generally should not be subject to U.S. federal withholding or income tax, provided that: (i) income or gain in respect of the
security is not effectively connected with your conduct of a trade or business in the United States, and (ii) you provide an appropriate
IRS Form W-8 certifying under penalties of perjury that you are not a United States person.
Other U.S. federal income tax treatments of the securities
are also possible. In 2007, the U.S. Treasury Department and the IRS released a notice requesting comments on the U.S. federal
income tax treatment of “prepaid forward contracts” and similar instruments. Among the issues addressed in the notice
is the degree, if any, to which income with respect to instruments such as the securities should be subject to U.S. withholding
tax. While the notice requests comments on appropriate transition rules and effective dates, it is possible that any Treasury regulations
or other guidance promulgated after consideration of these issues might materially and adversely affect the withholding tax consequences
of an investment in the securities, possibly with retroactive effect. Accordingly, you should consult your tax adviser regarding
the issues presented by the notice.
Possible Withholding Under Section 871(m) of the Code.
Section 871(m) of the Code and Treasury regulations promulgated thereunder (“Section 871(m)”) generally impose
a 30% withholding tax on dividend equivalents paid or deemed paid to non-U.S. holders with respect to certain financial instruments
linked to U.S. equities (“U.S. underlying equities”) or indices that include U.S. underlying equities. Section
871(m) generally applies to instruments that substantially replicate the economic performance of one or more U.S. underlying equities,
as determined based on tests set forth in the applicable Treasury regulations (a “specified security”). However,
the regulations, as modified by an IRS notice, exempt financial instruments issued prior to January 1, 2021 that do not have a
“delta” of one. Based on the terms of the securities and representations provided by us, our counsel is of the opinion
that the securities should not be treated as transactions that have a “delta” of one within the meaning of the regulations
with respect to any U.S. underlying equity and, therefore, should not be specified securities subject to withholding tax under
Section 871(m).
A determination that the securities are not subject to
Section 871(m) is not binding on the IRS, and the IRS may disagree with this treatment. Moreover, Section 871(m) is complex and
its application may depend on your particular circumstances. For example, if you enter into other transactions relating to a U.S.
underlying equity, you could be subject to withholding tax or income tax liability under Section 871(m) even if the securities
are not specified securities subject to Section 871(m) as a general matter. You should consult your tax adviser regarding the potential
application of Section 871(m) to the securities.
In the event withholding applies, we will not be required to pay any additional
amounts with respect to amounts withheld.
U.S. Federal Estate Tax
If you are an individual non-U.S. holder or an entity
the property of which is potentially includible in such an individual’s gross estate for U.S. federal estate tax purposes
(for example, a trust funded by such an individual and with respect to which the individual has retained certain interests or powers),
you should note that, absent an applicable treaty exemption, the securities may be treated as U.S. situs property subject to U.S.
federal estate tax. If you are such an individual or entity, you should consult your tax adviser regarding the U.S. federal estate
tax consequences of investing in the securities.
Information Reporting and Backup Withholding
Amounts paid on the securities, and the proceeds of a sale,
exchange or other disposition of the securities, may be subject to information reporting and, if you fail to provide certain identifying
information (such as an accurate taxpayer identification number if you are a U.S. holder) or meet certain other conditions, may
also be subject to backup withholding at the rate specified in the Code. If you are a non-U.S. holder that provides an appropriate
IRS Form W-8, you will generally establish an exemption from backup withholding. Amounts withheld under the backup withholding
rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the relevant
information is timely furnished to the IRS.
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Market Linked Securities—Leveraged Upside Participation to a Cap and Fixed Percentage Buffered Downside
Principal at Risk Securities Linked to the S&P 500® Index due November 8, 2021
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FATCA
Legislation commonly referred to as “FATCA”
generally imposes a withholding tax of 30% on payments to certain non-U.S. entities (including financial intermediaries) with respect
to certain financial instruments, unless various U.S. information reporting and due diligence requirements have been satisfied.
An intergovernmental agreement between the United States and the non-U.S. entity’s jurisdiction may modify these requirements.
This legislation applies to certain financial instruments that are treated as paying U.S.-source interest, dividends or dividend
equivalents or other U.S.-source “fixed or determinable annual or periodical” income (“FDAP income”).
If required under FATCA, withholding applies to payments of FDAP income. While existing Treasury regulations would also require
withholding on payments of gross proceeds of the disposition (including upon retirement) of certain financial instruments treated
as paying U.S.-source interest or dividends, the U.S. Treasury Department has indicated in subsequent proposed regulations its
intent to eliminate this requirement. The U.S. Treasury Department has indicated that taxpayers may rely on these proposed
regulations pending their finalization. If the securities were treated as debt instruments or as subject to Section 871(m), the
withholding regime under FATCA would apply to the securities. If withholding applies to the securities, we will not be required
to pay any additional amounts with respect to amounts withheld. If you are a non-U.S. holder, or a U.S. holder holding securities
through a non-U.S. intermediary, you should consult your tax adviser regarding the potential application of FATCA to the securities.
The preceding discussion constitutes the full opinion of
Davis Polk & Wardwell LLP regarding the material U.S. federal tax consequences of owning and disposing of the securities.
You should consult your tax adviser regarding all aspects
of the U.S. federal income and estate tax consequences of an investment in the securities and any tax consequences arising under
the laws of any state, local or non-U.S. taxing jurisdiction.