{"data":{"id":"sw_a4f8329a9ab3f448aa23","slug":"capital-one-series-k-and-j-preferreds-stay-deeply-discounted-past-call-date","title":"Capital One Series K and J Preferreds Stay Deeply Discounted Past Call Date","subheadline":"More than a year after becoming callable, Capital One's Series K and J preferred shares trade roughly 35 to 38 percent below their $25 par value, joining a broader group of bank preferreds left uncalled.","summary":"Capital One's Series K preferred trades near $15.54, a 37.84% discount to its $25 par value, more than ten months after its December 2025 call date passed. Series J shows a similar gap, raising questions about redemption timing.","body":"Capital One Financial Corp's Series K preferred stock, a 4.625% non-cumulative perpetual issue with a $25 liquidation preference, last traded at $15.54, a discount of roughly 37.84% to par. The shares became callable on December 1, 2025, meaning Capital One has had the option to redeem them at $25 for more than ten months without doing so. Series J, another Capital One preferred that passed its own call date over a year ago, trades in a comparable range, putting both issues 35 to 38 percent below the price at which they could theoretically be redeemed.\n\nThis pattern, in which a preferred stock remains callable but continues to trade well under par long after the call window opens, first stood out in data tracked on Preferred Stock AI, a Madison Labs research site. The gap matters because once a preferred becomes callable, its price typically should converge toward par if investors expect redemption soon. A persistent discount instead suggests the market is pricing in the likelihood that Capital One will leave the shares outstanding indefinitely rather than call them, at least for now.\n\nFor holders, the mechanics are straightforward even if the outcome is not. Series K pays a fixed $1.1562 annual dividend per share, producing a current yield of 7.44% at the recent price, well above the 4.625% stated coupon, because the yield is calculated on a market price far below face value. If Capital One were to call the shares at $25, holders would realize a capital gain of $9.46 per share, or about 60.9%, on top of dividends received. If the company does not call them, investors continue collecting the quarterly dividend, paid each March, June, September and December, without the appreciation that redemption would deliver. Neither outcome is certain, and Capital One has not publicly indicated its intentions for either series in available filings or news coverage.\n\nThe broader context for why banks leave older preferreds uncalled typically involves the cost of replacement capital. Many legacy preferred issues carry coupons set years ago under different rate conditions, and refinancing them with new perpetual preferred stock at current market rates can be more expensive for the issuer than simply continuing to pay the existing dividend. Capital One has other preferred series outstanding with coupons ranging from 4.250% to 5.000%, according to its securities listing, giving the company a range of comparably priced capital instruments already on its balance sheet.\n\nCapital One's broader corporate picture has shifted substantially in the past year. The company completed its acquisition of Discover Financial Services in May 2025, folding Discover Bank into its national banking subsidiary and expanding its payments network reach. That integration has been a recurring subject in recent coverage, including reporting from Kalkinemedia on what the Discover deal means for Capital One's scale, alongside separate reporting on an executive's Rule 144 share sale filing and a new Morgan Stanley auto-callable note tied to Capital One common stock carrying an 11.25% coupon. Capital One common shares (COF) closed at $196.22 on October 6, 2026, within a 52 week range of $174.24 to $259.63, according to the trading data accompanying the preferred stock listing.\n\nRate conditions add another layer. Treasury yields have been rising alongside higher oil prices, with traders awaiting a key U.S. bond sale, according to CNBC. Rising benchmark yields generally pressure fixed rate preferred securities, since newer issues or comparable instruments can offer higher income without relying on a deep discount to par, which may help explain part of the valuation gap facing older, lower coupon preferreds like Series K and J.\n\nCapital One's preferred shares are not isolated in trading below par after their call dates pass; the pattern echoes what analysts covering non-cumulative perpetual preferreds observe across the sector when market coupons fall below current yield expectations. What remains to be seen is whether Capital One addresses Series K or J specifically in upcoming earnings commentary or capital planning disclosures. Investors monitoring these securities will likely watch for any redemption announcement, changes in the dividend schedule, or statements tied to Capital One's third quarter results that could clarify the company's approach to its outstanding preferred stack following the Discover integration.","source":{"name":"Preferred Stock AI","slug":"preferredstock-ai"},"category":"Preferred Stocks","article_type":"News","license":"Free to republish, in full or in part, with attribution to Capital Data Wire and a link to the original article. No fees, registration, or permission required.","quality_score":81,"human_reviewed":false,"original_url":"https://preferredstock.ai/symbol/COF-P-K","featured_image":null,"published_at":"2026-10-07T11:25:15.695283+00:00","updated_at":"2026-10-07T11:25:15.695283+00:00","is_demo":false,"attribution":"Via Capital Data Wire. Discovered via Preferred Stock AI.","attribution_html":"Via Capital Data Wire. Discovered via <a href=\"https://preferredstock.ai/symbol/COF-P-K\">Preferred Stock AI</a>."},"meta":{"demo_data":false}}