Additional
Information about the Issuer, the Guarantor and the Notes
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 notes. 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):
Estimated
Value of the Notes
The
original offering price of each note includes certain costs that are borne by you. Because of these costs, the estimated value
of the notes on the trade date is less than the original offering price. The costs included in the original offering price relate
to selling, structuring, hedging and issuing the notes, as well as to our funding considerations for debt of this type.
The
costs related to selling, structuring, hedging and issuing the notes include (i) the agent discount (if any), (ii) the projected
profit that our hedge counterparty (which may be one of our affiliates or a dealer participating in the distribution of the notes)
expects to realize for assuming risks inherent in hedging our obligations under the notes and (iii) hedging and other costs relating
to the offering of the notes.
Our
funding considerations take into account the higher issuance, operational and ongoing management costs of market-linked debt such
as the notes 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 notes 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 notes.
If
the costs relating to selling, structuring, hedging and issuing the notes were lower, or if the assumed rate we use to determine
the economic terms of the notes were higher, the economic terms of the notes would be more favorable to you and the estimated
value would be higher. The estimated value of the notes as of the trade 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 notes 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 notes by estimating the value
of the combination of hypothetical financial instruments that would replicate the payout on the notes, 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 notes (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 notes. This rate is used for purposes of determining the estimated value of the notes since we
expect secondary market prices, if any, for the notes that are provided by WFS or any of its affiliates to generally reflect such
rate. WFS determined the estimated value of the notes based on this internal funding rate, rather than the assumed rate that we
use to determine the economic terms of the notes, 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 Notes 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 notes determined by WFS is subject to important limitations. See “Risk Factors—The Estimated
Value Of The Notes Is Determined By Our Affiliate’s Pricing Models, Which May Differ From Those Of Other Dealers”
and “Risk Factors—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 notes after issuance
The
estimated value of the notes is not an indication of the price, if any, at which WFS or any other person may be willing to buy
the notes from you in the secondary market. The price, if any, at which WFS or any of its affiliates may purchase the notes in
the secondary market will be based upon WFS’s proprietary pricing models and will fluctuate over the term of the notes 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 trade date because the secondary market price will be reduced by a bid-offer spread, which may vary depending on
the aggregate principal amount of the notes 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 notes is likely to be less than the original offering price.
If
WFS or any of its affiliates makes a secondary market in the notes at any time up to the original issue date or during the 3-month
period following the trade 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 notes 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 notes 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 notes
on your brokerage account statement.
If
WFS or any of its affiliates makes a secondary market in the notes, WFS expects to provide those secondary market prices to any
unaffiliated broker-dealers through which the notes are held and to commercial pricing vendors. If you hold your notes through
an account at a broker-dealer other than WFS or any of its affiliates, that broker-dealer may obtain market prices for the notes
from WFS (directly or indirectly), but could also obtain such market prices from other sources, and may be willing to purchase
the notes 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 notes. As a result, if you hold your notes through an account at a broker-dealer other than WFS or any of its affiliates,
the value of the notes on your brokerage account statement may be different than if you held your notes at WFS or any of its affiliates.
The
notes will not be listed or displayed on any securities exchange or any automated quotation system. Although WFS and/or its affiliates
may buy the notes from investors, they are not obligated to do so and are not required to make a market for the notes. There can
be no assurance that a secondary market will develop.
Investor
Considerations
We
have designed the notes for investors who:
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seek
the potential for an unleveraged positive return at maturity based on either the appreciation
or the depreciation of the underlier, but only if a barrier event does not occur;
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understand
that any positive return on the notes will effectively be capped at 19.30%, regardless
of the appreciation or depreciation of the underlier, which may be significant;
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understand
that, if a barrier event does occur, you will not receive any positive return on the
notes, regardless of the final underlier level;
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understand
that the potential for a positive return based on the appreciation or depreciation of
the underlier will terminate if the closing level of the underlier is greater than the
upper barrier level or lower than the lower barrier level on any trading day during the
measurement period (i.e., if a barrier event has occurred);
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desire
repayment of the principal amount at maturity regardless of the performance of the underlier;
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are
willing to forgo interest payments on the notes and dividends on the securities included
in the underlier; and
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are
willing to hold the notes until maturity.
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The
notes 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 notes to maturity;
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seek
certainty of receiving a positive return on their investment;
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seek
uncapped exposure to the performance of the underlier;
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are
unwilling to purchase notes with an estimated value as of the trade 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 underlier but are unwilling to accept the risk/return trade-offs inherent
in the payment at stated maturity for the notes;
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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 underlier generally, or to the exposure to the underlier
that the notes 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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Hypothetical
Payout Profile
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The
following profile is based on an upper barrier level of 119.30% of the initial underlier level, a lower barrier level of 80.70%
of the initial underlier level and an original offering price of $1,000 per note. This graph has been prepared for purposes of
illustration only. Your actual return will depend on the actual final underlier level, whether or not a barrier event has occurred,
the actual price you pay for your notes and whether you hold your notes to maturity.
Risk
Factors
The
notes have complex features and investing in the notes 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 notes 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 notes in light of your particular
circumstances.
You
May Not Receive Any Positive Return On The Notes.
If
a barrier event has occurred, you will not receive any positive return on the notes. If a barrier event has not occurred, your
return will be based on the percentage increase or decrease in the underlier from the initial underlier level to the final underlier
level. Even if a barrier event has not occurred, the amount you receive at stated maturity may only be equal to or slightly greater
than the principal amount and your yield on the notes 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.
The
Potential Return On The Notes Is Limited
Because
you will participate in the appreciation or deprecation of the underlier only if a barrier event does not occur, the upper barrier
level and lower barrier level are effectively caps on the return at maturity. Any positive return on the notes will be capped
at 19.30%, regardless of the appreciation or depreciation of the underlier, which may be significant.
If
a barrier event occurs, there will be no positive return at maturity and you will receive only the principal amount per note.
The
Potential For A Positive Return Based On The Appreciation Or Depreciation Of The Underlier May Terminate On Any Trading Day During
The Measurement Period.
The
notes provide the potential for an unleveraged positive return at maturity based on either the appreciation of the underlier or
the depreciation of the underlier, but only if a barrier event does not occur. A barrier event will occur if the closing
level of the underlier is greater than the upper barrier level or less than the lower barrier level on
any trading day during the measurement period. The measurement period comprises each trading
day following the trade date up to and including the determination date. If a barrier event occurs, you will not participate in
any appreciation or depreciation of the underlier and you will receive only the principal amount at maturity, even if the closing
level of the underlier falls outside the barrier levels only briefly.
The
Return On The Notes May Change Significantly Despite Only A Small Change In The Closing Level Of The Underlier.
The
return on the notes may change significantly despite only a small change in the closing level of the underlier. If a barrier event
occurs, you will not receive any positive return on the notes even if the final underlier level significantly exceeds the initial
underlier level.
This
means that, based on the upper barrier level of 119.30% of the initial underlier level, while an increase in the level of the
underlier of 19.30% will not cause a barrier event to occur, an increase of more than 19.30% will cause a barrier event to occur
and you will not receive any positive return on the notes. Accordingly, if a barrier event occurs and the underlier return is
positive, the return on the notes will be less, and perhaps significantly less, than the return you could have earned if you invested
directly in the stocks included in the underlier.
Similarly,
if a barrier event occurs and the final underlier level is less than the initial underlier level, you will not receive any positive
return on the notes and you will not receive the benefit of the absolute underlier return. This means that, based on the lower
barrier of 80.70% of the initial underlier level, while a decrease in the level of the underlier of 19.30% will not cause a barrier
event to occur, a decrease of more than 19.30% will cause a barrier event to occur and you will not receive any positive return
on the notes. Accordingly, if a barrier event occurs and the underlier return is negative, you will not receive the benefit of
the absolute underlier return.
You
Will Be Required To Recognize Taxable Income On The Notes Prior To Maturity.
If
you are a U.S. holder of a note, you will be required to recognize taxable interest income in each year that you hold the note,
even though you will not receive any payment in respect of the note prior to maturity (or earlier sale, exchange or retirement).
In addition, any gain you recognize will be treated as ordinary interest income rather than capital gain. You should review the
section of this pricing supplement entitled “United States Federal Tax Considerations.”
The
Notes Are Subject To Credit Risk.
The
notes 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 notes are subject to creditworthiness, and you will have
no ability to pursue any securities included in the underlier for payment. As a result, our and the Guarantor’s actual and
perceived creditworthiness may affect the value of the notes and, in the event we and the Guarantor were to default on the obligations
under the notes and the guarantee, you may not receive any amounts owed to you under the terms of the notes.
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, including the notes, 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 notes 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 Notes Have Limited Rights Of Acceleration.
Payment
of principal on the notes 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 notes, you will have no right to accelerate the payment of principal on the notes if we fail
in the performance of any of our obligations under the notes, other than the obligations to pay principal and interest on the
notes. See “Description of Debt Securities of Wells Fargo Finance LLC—Events of Default and Covenant Breaches”
in the accompanying prospectus.
Holders
Of The Notes 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 notes 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
Notes 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 Notes.
The
notes 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 notes.
The
Estimated Value Of The Notes On The Trade Date, Based On WFS’s Proprietary Pricing Models, Is Less Than The Original Offering
Price.
The
original offering price of the notes includes certain costs that are borne by you. Because of these costs, the estimated value
of the notes on the trade date is less than the original offering price. The costs included in the original offering price relate
to selling, structuring, hedging and issuing the notes, as well as to our funding considerations for debt of this type. The costs
related to selling, structuring, hedging and issuing the notes include (i) the agent discount (if any), (ii) the projected profit
that our hedge counterparty (which may be one of our affiliates or a dealer participating in the distribution of the notes) expects
to realize for assuming risks inherent in hedging our obligations under the notes and (iii) hedging and other costs relating to
the offering of the notes. Our funding considerations are reflected in the fact that we determine the economic terms of the notes
based on an assumed rate that is generally lower than our internal funding rate, which is described above under “Estimated
Value of the Notes—Determining the estimated value.” If the costs relating to selling, structuring, hedging and issuing
the notes were lower, or if the assumed rate we use to determine the economic terms of
the
notes were higher, the economic terms of the notes would be more favorable to you and the estimated value would be higher.
The
Estimated Value Of The Notes Is Determined By Our Affiliate’s Pricing Models, Which May Differ From Those Of Other Dealers.
The
estimated value of the notes 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 Notes—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 notes may be higher, and perhaps materially higher, than the estimated value of the notes
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 notes.
The
Estimated Value Of The Notes Is Not An Indication Of The Price, If Any, At Which WFS Or Any Other Person May Be Willing To Buy
The Notes From You In The Secondary Market.
The
price, if any, at which WFS or any of its affiliates may purchase the notes in the secondary market will be based on WFS’s
proprietary pricing models and will fluctuate over the term of the notes as a result of changes in the market and other factors
described in the next risk factor. Any such secondary market price for the notes will also be reduced by a bid-offer spread, which
may vary depending on the aggregate principal amount of the notes 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 notes is likely to be less than the original offering price.
If
WFS or any of its affiliates makes a secondary market in the notes at any time up to the original issue date or during the 3-month
period following the trade 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 notes 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 notes 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 notes on your brokerage account
statement. If you hold your notes through an account at a broker-dealer other than WFS or any of its affiliates, the value of
the notes on your brokerage account statement may be different than if you held your notes at WFS or any of its affiliates, as
discussed above under “Estimated Value of the Notes—Valuation of the notes after issuance.”
The
Value Of The Notes Prior To Stated Maturity Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways.
The
value of the notes prior to stated maturity will be affected by the level of the underlier at that time, whether a barrier event
has occurred, 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 notes. When we refer to the “value”
of your note, we mean the value that you could receive for your note if you are able to sell it in the open market before the
stated maturity date.
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Underlier
Performance. The value of the notes prior to maturity will depend substantially on
the then-current level of the underlier and whether a barrier event has occurred. The
price at which you may be able to sell the notes before stated maturity may be at a discount,
which could be substantial, from their original offering price, if a barrier event has
occurred.
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Interest
Rates. The value of the notes may be affected by changes in the interest rates in
the U.S. markets.
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Volatility
Of The Underlier. Volatility is the term used to describe the size and frequency
of market fluctuations. The value of the notes may be affected if the volatility of the
underlier changes.
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Time
Remaining To Maturity. The value of the notes 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 underlier. This difference will most likely reflect a discount due to expectations
and uncertainty concerning the level of the underlier 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 notes will approach the amount that could be payable at maturity
based on the then-current level of the underlier.
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Dividend
Yields On The Securities Included In The Underlier. The value of the notes may be
affected by the dividend yields on securities included in the underlier.
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In
addition to the derivative component factors, the value of the notes 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 notes attributable to another factor,
such as a change in the level of the underlier. Because several factors are expected to affect the value of the notes, changes
in the level of the underlier may not result in a comparable change in the value of the notes. We anticipate that the value of
the notes will always be at a discount to the original offering price plus the effective cap on the notes described above.
The
Notes Will Not Be Listed On Any Securities Exchange And We Do Not Expect A Trading Market For The Notes To Develop.
The
notes 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 notes from holders, they are not obligated to do so and are not required to make a market for
the notes. 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 notes, the price at which you may be able to sell your notes is likely to depend on
the price, if any, at which the agent is willing to buy your notes.
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
notes prior to stated maturity. This may affect the price you receive upon such sale. Consequently, you should be willing to hold
the notes to stated maturity.
Your
Return On The Notes Could Be Less Than If You Owned The Securities Included In The Underlier.
Your
return on the notes will not reflect the return you would realize if you actually owned the securities included in the underlier
and received the dividends and other payments paid on those securities. This is in part because the cash settlement amount payable
at stated maturity will be determined by reference to the final underlier level, which will be calculated by reference to the
prices of the securities in the underlier without taking into consideration the value of dividends and other payments paid on
those securities. In addition, assuming a barrier event has not occurred, any positive return on the notes based on performance
of the underlier will be effectively capped as described above.
Historical
Levels Of The Underlier Should Not Be Taken As An Indication Of The Future Performance Of The Underlier During The Term Of The
Notes.
The
trading prices of the securities included in the underlier will determine the cash settlement amount payable at maturity to you.
As a result, it is impossible to predict whether the closing level of the underlier will fall or rise compared to the initial
underlier level. Trading prices of the securities included in the underlier 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 underlier do not provide an indication of the future performance
of the underlier.
Changes
That Affect The Underlier May Adversely Affect The Value Of The Notes And The Amount You Will Receive At Stated Maturity.
The
policies of the underlier sponsor concerning the calculation of the underlier and the addition, deletion or substitution of securities
comprising the underlier and the manner in which the underlier sponsor takes account of certain changes affecting such securities
may affect the level of the underlier and, therefore, may affect the value of the notes and the cash settlement amount payable
at maturity. The underlier sponsor may discontinue or suspend calculation or dissemination of the underlier or materially alter
the methodology by which it calculates the underlier. Any such actions could adversely affect the value of the notes.
We
Cannot Control Actions By Any Of The Unaffiliated Companies Whose Securities Are Included In The Underlier.
Actions
by any company whose securities are included in the underlier may have an adverse effect on the price of its security, the final
underlier level and the value of the notes. Our parent company, Wells Fargo & Company, is currently one of the companies included
in the underlier, but neither we nor the Guarantor are affiliated with any of the other companies included in the underlier. The
unaffiliated companies included in the underlier will have no obligations with respect to the notes, 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 notes and will not be responsible for, and will not have participated in, the determination of the timing of, prices for,
or quantities of, the notes to be issued. These companies will not be involved with the administration, marketing or trading of
the notes and will have no obligations with respect to any amounts to be paid to you on the notes.
We
And Our Affiliates Have No Affiliation With The Underlier Sponsor And Have Not Independently Verified Its Public Disclosure Of
Information.
We
and our affiliates are not affiliated in any way with the underlier 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
underlier. We have derived the information about the underlier sponsor and the underlier contained in this pricing supplement
and the accompanying market measure supplement from publicly available information, without independent verification. You, as
an investor in the notes, should make your own investigation into the underlier and the underlier sponsor. The underlier sponsor
is not involved in the offering of the notes made hereby in any way and has no obligation to consider your interests as an owner
of the notes in taking any actions that might affect the value of the notes.
The
Stated Maturity Date Will Be Postponed If The Determination Date Is Postponed.
The
determination date will be postponed if the calculation agent determines that a market disruption event has occurred or is continuing
on the determination date or if the originally scheduled determination date is not a trading day. If such a postponement occurs,
the stated maturity date will be postponed until two business days after the postponed determination date.
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 notes, which we refer to as a “participating dealer,” are potentially adverse to
your interests as an investor in the notes. 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 notes, and in so doing
they will have no obligation to consider your interests as an investor in the notes. 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 notes.
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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 notes. WFS, which is our affiliate,
will be the calculation agent for the notes. As calculation agent, WFS will determine
the final underlier level and may be required to make other determinations that affect
the return you receive on the notes 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 determination date, which
may result in postponement of the determination date; determining the final underlier
level if the determination date is postponed to the last day to which it may be postponed
and a market disruption event occurs on that day; if the underlier is discontinued, selecting
a successor underlier or, if no successor underlier is available, determining the final
underlier level; and determining whether to adjust the closing level on the determination
date in the event of certain changes in or modifications to the underlier. 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 notes, and
WFS’s determinations as calculation agent may adversely affect your return on the
notes.
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•
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The
estimated value of the notes was calculated by our affiliate and is therefore not an
independent third-party valuation. WFS calculated the estimated value of the
notes 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 Notes Is Determined By Our Affiliate’s Pricing Models, Which May Differ From
Those Of Other Dealers” above. Accordingly, the estimated value of the notes set
forth on the cover page of this pricing supplement is not an independent third-party
valuation.
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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 notes and may adversely affect the level of the underlier.
Our affiliates or any dealer participating in the offering of the notes or its
affiliates may, at present or in the future, publish research reports on the underlier
or the companies whose securities are included in the underlier. 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 notes.
Any research reports on the underlier or the companies whose securities are included
in the underlier could adversely affect the level of the underlier and, therefore, adversely
affect the value of and your return on the notes. You are encouraged to derive information
concerning the underlier 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 underlier or the companies whose securities are included in the
underlier published on or prior to the trade date could result in an increase in the
level of the underlier on the trade date, which would adversely affect investors in the
notes by increasing the level at which the underlier must close on the determination
date in order for investors in the notes 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 underlier may adversely affect the level of the
underlier. Our affiliates or any
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participating
dealer or its affiliates may, at present or in the future, engage in business with the companies whose securities are included
in the underlier, 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 underlier and, therefore, adversely affect
the value of and your return on the notes. 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 underlier. 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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Hedging
activities by our affiliates or any participating dealer or its affiliates may adversely
affect the level of the underlier. We expect to hedge our obligations under the
notes 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 underlier or listed or over-the-counter
derivative or synthetic instruments related to the underlier 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 underlier, or derivative
or synthetic instruments related to the underlier or such securities, they may liquidate
a portion of such holdings at or about the time of the determination date or at or about
the time of a change in the securities included in the underlier. These hedging activities
could potentially adversely affect the level of the underlier and, therefore, adversely
affect the value of and your return on the notes.
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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 underlier. Our affiliates or any participating dealer
or its affiliates may engage in trading in the securities included in the underlier and
other instruments relating to the underlier 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 underlier and, therefore, adversely
affect the value of and your return on the notes.
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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, creating a further incentive for
the participating dealer to sell the notes to you. If any participating dealer
or any of its affiliates conducts hedging activities for us in connection with the notes,
that participating dealer or its affiliates will expect to realize a projected profit
from such hedging activities. If a participating dealer receives a concession for the
sale of the notes to you, this projected hedging profit will be in addition to the concession,
creating a further incentive for the participating dealer to sell the notes to you.
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Determining
Payment at Stated Maturity
On
the stated maturity date, you will receive a cash payment per note (the cash settlement amount) calculated as follows:
Hypothetical
Returns
The
following table illustrates, for a range of hypothetical final underlier levels:
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•
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the
hypothetical percentage change from the hypothetical initial underlier level to the hypothetical
final underlier level; and
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•
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the
hypothetical pre-tax total return.
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The
table below and the examples that follow assume that an investor purchases the notes for $1,000 per note.
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Hypothetical
underlier return
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Hypothetical
pre-tax total return
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A
barrier event has not occurred
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A
barrier event has occurred
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50.00%
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N/A
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0.00%
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40.00%
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N/A
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0.00%
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30.00%
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N/A
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0.00%
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20.00%
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N/A
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0.00%
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19.31%
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N/A
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0.00%
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19.30%
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19.30%
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0.00%
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10.00%
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10.00%
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0.00%
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5.00%
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5.00%
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0.00%
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2.50%
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2.50%
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0.00%
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0.00%
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0.00%
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0.00%
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-2.50%
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2.50%
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0.00%
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-5.00%
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5.00%
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0.00%
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-10.00%
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10.00%
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0.00%
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-19.30%
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19.30%
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0.00%
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-19.31%
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N/A
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0.00%
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-20.00%
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N/A
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0.00%
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-25.00%
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N/A
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0.00%
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-50.00%
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N/A
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0.00%
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-75.00%
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N/A
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0.00%
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-100.00%
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N/A
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0.00%
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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 return will depend on the actual final underlier level and maximum settlement amount.
If,
for example, a barrier event has occurred and the underlier return were determined to be 50.00%, the pre-tax return on
your notes at maturity would be 0.00%, as shown in the table above. Additionally, if the underlier return were determined to be
-50.00%, the pre-tax return on your notes at maturity would be 0.00%, as shown in the table above.
If,
for example, a barrier event has not occurred and the underlier return were determined to be 10.00%, the absolute underlier
return would be 10.00% and the pre-tax return on your notes at maturity would be 10.00%, as shown in the table above. Additionally,
if the underlier return were determined to be -10.00%, the absolute underlier return would be 10.00% and the pre-tax return on
your notes at maturity would be 10.00%, as shown in the table above. However, you will benefit
from the absolute underlier return only if a barrier event has not occurred. Because a barrier event will occur
if, on any trading day during the measurement period (including the determination date), the closing level of the underlier
is greater than the upper barrier level (119.30% of the initial underlier level) or less than the lower barrier level (80.70%
of the initial underlier level), the pre-tax return on your notes will be capped at a positive return of 19.30%. As a result,
you would not benefit from a final underlier level on the determination date (or a closing level of the underlier on any other
trading day during the measurement period) that is greater than the upper barrier or less than the lower barrier. In fact, a final
underlier level on the determination date (or a closing level of the underlier on any other trading day during the measurement
period) that is greater than the upper barrier or less than the lower barrier will result in you receiving no positive return
on the notes.
Additional
Terms of the Notes
Wells
Fargo Finance LLC will issue the notes 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 underlier 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 underlier 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 underlier 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 underlier.
Calculation
Agent
Wells
Fargo Securities, LLC, one of our affiliates and a wholly owned subsidiary of Wells Fargo & Company, will act as initial calculation
agent for the notes and may appoint agents to assist it in the performance of its duties. Pursuant to the calculation agent agreement,
we may appoint a different calculation agent without your consent and without notifying you.
The
calculation agent will determine the cash settlement amount you receive at stated maturity. In addition, the calculation agent
will, among other things:
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determine
whether a market disruption event or non-trading day has occurred;
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•
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determine
if adjustments are required to the closing level of the underlier under various circumstances;
and
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•
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if
publication of the underlier is discontinued, select a successor underlier (as defined
below) or, if no successor underlier is available, determine the closing level of the
underlier.
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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 underlier or any successor underlier 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 underlier or any successor underlier 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
underlier or any successor underlier 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 underlier or any
successor underlier 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 underlier or any successor underlier
are traded or any related futures or options exchange prior to its scheduled closing
time unless the earlier closing time is announced by the
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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 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 underlier or successor underlier
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 underlier or any successor
underlier will be based on a comparison of (x) the portion of the level of such underlier
attributable to that security and (y) the overall level of the underlier or successor
underlier, in each case immediately before the occurrence of the market disruption event;
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(2)
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the
“close of trading” on any trading day for the underlier or any successor
underlier means the scheduled closing time of the relevant stock exchanges with respect
to the securities underlying the underlier or successor underlier 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 underlier or successor
underlier 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 underlier or successor
underlier, 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 underlier or any successor underlier
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 underlier or
any successor underlier on which each relevant stock exchange for the securities underlying
the underlier or any successor underlier 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 determination date, then the determination date 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 determination date, that eighth
trading day shall be deemed to be the determination date. If the determination date has been postponed eight trading days after
the originally scheduled determination date and a market disruption event occurs or is continuing on such eighth trading day,
the calculation agent will determine the closing level of the underlier on such eighth trading day in accordance with the formula
for and method of calculating the closing level of the underlier 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 underlier. 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 Underlier
If
at any time the method of calculating the underlier or a successor underlier, or the closing level thereof, is changed in a material
respect, or if the underlier or a successor underlier is in any other way modified so that such underlier does not, in the opinion
of the calculation agent, fairly represent the level of such underlier 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 underlier
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 underlier comparable to the underlier or successor underlier as if those changes or modifications
had not been made, and the calculation agent will calculate the closing level of the underlier or successor underlier with reference
to such underlier, as so adjusted. Accordingly, if the method of calculating the underlier or successor underlier is modified
so that the level of such underlier 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 underlier), then the calculation
agent will adjust the underlier or successor underlier in order to arrive at a level of such underlier as if it had not been modified
(e.g., as if the split or reverse split had not occurred).
Discontinuance
of the Underlier
If
the sponsor or publisher of the underlier (the “underlier sponsor”) discontinues publication of the underlier,
and the underlier 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 underlier (a “successor underlier”), then, upon the calculation
agent’s notification of that determination to the trustee and Wells Fargo Finance LLC, the calculation agent will substitute
the successor underlier as calculated by the relevant underlier sponsor or any other entity and calculate the final underlier
level as described above. Upon any selection by the calculation agent of a successor underlier, Wells Fargo Finance LLC will cause
notice to be given to holders of the notes.
In
the event that the underlier sponsor discontinues publication of the underlier prior to, and the discontinuance is continuing
on, the determination date and the calculation agent determines that no successor underlier is available at such time, the calculation
agent will calculate a substitute closing level for the underlier in accordance with the formula for and method of calculating
the underlier last in effect prior to the discontinuance, but using only those securities that comprised the underlier immediately
prior to that discontinuance. If a successor underlier is selected or the calculation agent calculates a level as a substitute
for the underlier, the successor underlier or level will be used as a substitute for the underlier for all purposes, including
the purpose of determining whether a market disruption event exists.
If
on the determination date the underlier sponsor fails to calculate and announce the level of the underlier, the calculation agent
will calculate a substitute closing level of the underlier in accordance with the formula for and method of calculating the underlier
last in effect prior to the failure, but using only those securities that comprised the underlier 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 underlier sponsor to calculate and
announce the level of, the underlier may adversely affect the value of the notes.
Events
of Default and Acceleration
If
an event of default with respect to the notes has occurred and is continuing, the amount payable to a holder of a note upon any
acceleration permitted by the notes, with respect to each note, will be equal to the cash settlement amount, calculated as provided
herein. The cash settlement amount will be calculated as though the date of acceleration were the determination date.
S&P
500® Index
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 from Bloomberg Financial
Markets without independent verification.
The
historical performance of the underlier should not be taken as an indication of the future performance of the underlier during
the term of the notes.
The
following graph sets forth the daily closing levels of the underlier for each day in the period from January 1, 2014 through November
1, 2019. The closing level on November 1, 2019 was 3,066.91.
S&P
500® Index Daily Closing Levels
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 notes 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.
Benefit
Plan Investor Considerations
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 notes. 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 notes 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 notes 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 notes 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 notes. Those class exemptions are:
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•
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PTCE
96-23, for specified transactions determined by in-house asset managers;
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•
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PTCE
95-60, for specified transactions involving insurance company general accounts;
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•
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PTCE
91-38, for specified transactions involving bank collective investment funds;
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•
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PTCE
90-1, for specified transactions involving insurance company separate accounts; and
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•
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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 notes or any interest in the notes will be deemed to have represented by its purchase and holding that
either:
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•
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no
portion of the assets used by such purchaser or holder to acquire or purchase the notes
constitutes assets of any plan or Non-ERISA Arrangement; or
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•
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the
purchase and holding of the notes 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 notes 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 notes and the availability of exemptive relief.
The
notes are contractual financial instruments. The financial exposure provided by the notes 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 notes. The notes 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 notes.
Purchasers
of the notes have the exclusive responsibility for ensuring that their purchase, holding and subsequent disposition of the notes
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 notes 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.
United
States Federal Tax Considerations
The
following is a discussion of the material U.S. federal income and certain estate tax consequences of the ownership and disposition
of the notes. It applies to you only if you purchase a note for cash in the initial offering at the “issue price,”
which is the first price at which a substantial amount of the notes is sold to the public, and hold the note as a capital asset
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (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
“real estate investment trust”;
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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 notes;
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a
person holding a note as part of a “straddle” or conversion transaction or
who has entered into a “constructive sale” with respect to a note;
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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 notes, 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 notes or a partner in such a partnership, you should consult your tax adviser as to the particular U.S.
federal tax consequences of holding and disposing of the notes to you.
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. If any of the issuers of the underlying stocks were so treated, certain adverse U.S. federal tax consequences
might apply to you, if you are a non-U.S. holder (as defined below). You should refer to information filed with the Securities
and Exchange Commission or other governmental authorities 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.
This
discussion is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury
regulations, all as of the date hereof, 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, the potential application of the alternative minimum tax or the Medicare tax on net 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 the U.S. federal income and estate tax laws to your particular situation, as well
as any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction.
Tax
Treatment of the Notes
In
the opinion of our counsel, Davis Polk & Wardwell LLP, which is based on current market conditions, the notes should be treated
as “contingent payment debt instruments” for U.S. federal income tax purposes and as “debt obligations”
for U.S. federal estate tax purposes, and the discussion herein is based on this treatment.
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 note 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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Interest
Accruals on the Notes. Pursuant to rules governing the tax treatment of contingent payment debt instruments (the “contingent
debt regulations”), you will be required to accrue interest income on the notes on a constant yield basis based on a
comparable yield, as described below, regardless of whether you use the cash or accrual method of accounting for U.S. federal
income tax purposes. Accordingly, you generally will be required to include interest in your taxable income in each year that
you hold the notes even though the notes do not provide for a payment until maturity (or earlier sale, exchange or retirement).
Under
the contingent debt regulations, you must accrue an amount of ordinary interest income, as original issue discount (“OID”)
for U.S. federal income tax purposes, for each accrual period prior to and including the maturity date of the notes that equals
the product of:
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the
adjusted issue price (as defined below) of the notes as of the beginning of the accrual
period,
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the
comparable yield (as defined below) of the notes, adjusted for the length of the accrual
period, and
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a
fraction, the numerator of which is the number of days during the accrual period that
you held the notes and the denominator of which is the number of days in the accrual
period.
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The
“adjusted issue price” of a note is its issue price increased by any interest income previously accrued.
As
used in the contingent debt regulations, the term “comparable yield” means the greater of (i) the annual yield
we would pay, as of the issue date, on a fixed-rate, nonconvertible debt instrument with no contingent payments, but with terms
and conditions otherwise comparable to those of the notes, and (ii) the applicable federal rate.
We
have determined that the comparable yield for the notes is a rate of 1.67% per annum, compounded semi-annually. Based on the comparable
yield set forth above, the projected payment schedule for a note (assuming an issue price of $1,000) consists of a single projected
amount equal to $1,033.5969 due at maturity.
The
following table states the amount of OID (without taking into account any income or loss recognized in connection with the sale,
exchange or retirement of the note) that will be deemed to have accrued with respect to a note for each accrual period (assuming
a day count convention of 30 days per month and 360 days per year), based upon the comparable yield set forth above.
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ACCRUAL
PERIOD
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OID
DEEMED TO
ACCRUE DURING
ACCRUAL PERIOD
(PER NOTE)
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TOTAL
OID DEEMED
TO HAVE ACCRUED
FROM ORIGINAL
ISSUE DATE (PER
NOTE) AS OF END
OF ACCRUAL
PERIOD
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Original
Issue Date through December 31, 2019
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$2.4122
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$2.4122
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January
1, 2020 through June 30, 2020
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$8.3701
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$10.7823
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July
1, 2020 through December 31, 2020
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$8.4400
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$19.2223
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January
1, 2021 through June 30, 2021
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$8.5105
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$27.7328
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July
1, 2021 through Maturity Date
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$5.8641
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$33.5969
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For
U.S. federal income tax purposes, you are required under the contingent debt regulations to use the comparable yield and the projected
payment schedule established by us in determining interest accruals and adjustments in respect of a note, unless you timely disclose
and justify the use of a different comparable yield and projected payment schedule to the Internal Revenue Service (the “IRS”).
Neither
the comparable yield nor the projected payment schedule constitutes a representation by us regarding the actual amount that we
will pay on the notes.
Sale,
Exchange or Retirement of Notes. You will recognize taxable gain or loss on the sale, exchange or retirement of a note equal
to the difference between the amount received and your adjusted tax basis in the note. Any gain recognized will be treated as
ordinary interest income and loss will be ordinary loss to the extent of previous interest inclusions and capital loss thereafter.
The amount of gain or loss on a sale, exchange or retirement of a note will be equal to the difference between (a) the amount
received by you and (b) your adjusted tax basis in the note.
Your
adjusted tax basis in a note generally will be equal to your original purchase price for the note, increased by any interest income
you previously accrued.
Special
rules may apply if the payment at maturity on the notes is treated as becoming fixed prior to maturity. For this purpose, the
payment at maturity will be treated as fixed if the contingencies with respect to the payment are remote or incidental. Under
these rules, a U.S. holder would be required to account for the difference between the originally projected payment and the fixed
payment in a reasonable manner. In addition, a U.S. holder would be required to make adjustments to, among other things, the U.S.
holder’s accrual periods and tax basis in the notes. The character of any gain or loss on a sale or exchange of a note also
might be affected. U.S. holders should consult their tax advisers regarding the application of these rules.
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 note
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, (ii) a former citizen or resident of the United States or (iii) a person
for whom income or gain in respect of the notes is effectively connected with the conduct of a trade or business in the United
States. If you are or may become such a person during the period in which you hold a note, you should consult your tax adviser
regarding the U.S. federal tax consequences of an investment in the notes.
Treatment
of Income and Gain on the Notes. You should not be subject to U.S. federal income or withholding tax in respect of the notes,
provided that interest (including amounts treated as OID) on the notes qualifies as “portfolio interest” and is not
subject to withholding under the “FATCA” regime described below. Subject to the discussions above concerning Section
897 of the Code and below concerning Section 871(m), interest (including amounts treated as OID) on the notes should generally
qualify as portfolio interest, exempt from withholding (which for an individual non-U.S. holder is pursuant to Section 871(h)
of the Code), provided that:
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you
do not own, directly or by attribution, ten percent or more of the total combined voting
power of all classes of stock of Wells Fargo & Company entitled to vote;
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you
are not a controlled foreign corporation related, directly or indirectly, to Wells Fargo
& Company through stock ownership;
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you
are not a bank receiving interest under Section 881(c)(3)(A) of the Code; and
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you
provide to the applicable withholding agent an appropriate IRS Form W-8 on which you
certify under penalties of perjury that you are not a U.S. person.
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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 exempt financial instruments issued prior to January 1, 2021 that do not have a
“delta” of one. Based on the terms of the notes and representations provided by us, our counsel is of the opinion
that the notes 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). Unless otherwise indicated, the discussion in this pricing supplement assumes that the notes are not specified
securities subject to withholding tax under Section 871(m).
A
determination that the notes 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 notes 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 notes.
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
A
note held by an individual non-U.S. holder who at death is not a citizen or a resident of the United States for U.S. federal estate
tax purposes generally will not be includible in the individual’s gross estate, and will be deemed “property without
the United States” under Section 2105 of the Code, for U.S. federal estate tax purposes if, at the time of death, interest
on the note would qualify as portfolio interest exempt from withholding under Section 871(h), as described above, without regard
to the certification requirement described in the fourth bullet above under “—Treatment of Income and Gain on the
Notes.”
You
should consult your tax adviser regarding the U.S. federal estate tax consequences of an investment in the notes in your particular
situation.
Backup
Withholding and Information Reporting
Information
returns generally will be filed with the IRS with respect to amounts treated as interest on the notes and may be filed with the
IRS in connection with the payment of proceeds from a sale, exchange or other disposition of the notes. 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, you 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.
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. Withholding under these rules (if applicable) applies to any payment
on the notes of amounts treated as interest or as “dividend equivalents.” While existing Treasury regulations would
also require withholding on payments of gross proceeds of the disposition (including upon retirement) of financial instruments
such as the notes, 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 withholding applies to the notes, we will not be required to pay any additional amounts with respect to amounts withheld. Both
U.S. and non-U.S. holders should consult their tax advisers regarding the potential application of FATCA to the notes.
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 notes.