Wells Fargo Finance Launches S&P 500 Linked Securities with 26.55% Upside Cap and 15% Downside Buffer

Structured Product Design Delivers Capped Upside with Contingent Downside Participation

The securities disclosed in the filing represent a structured product that ties investor returns to the performance of the S&P 500 Index from July 30, 2026 to July 31, 2028. Unlike conventional bonds, these securities do not provide fixed coupon payments or principal repayment. Instead, the maturity payment amount will vary based on the ending value of the S&P 500 relative to its starting value on the pricing date. The disclosure specifies that if the S&P 500 increases, investors will participate in 100% of the percentage gain, but their upside is capped at a maximum return of at least 26.55% of face amount, resulting in a maximum payment of at least $1,265.50 per security.

The contingent return structure activates different payoff mechanics depending on the magnitude of market movement. If the S&P 500 declines but the decrease does not exceed 15%, investors receive their face amount plus a positive return equal to 50% of the absolute decline value, effectively capped at a positive return of 7.50%. The filing indicates that this buffered structure provides meaningful downside cushioning within a defined range. However, if the index falls by more than 15%, investors face full 1-to-1 downside exposure to losses in excess of the buffer amount, meaning they could lose up to 85% of their face value investment at maturity.

Credit Risk and Issuer Guarantees Define Investor Protections

The filing emphasizes that all payments on the securities are subject to credit risk, as the instruments are unsecured obligations of Wells Fargo Finance LLC with a full and unconditional guarantee from Wells Fargo & Company. The disclosure states explicitly that investors will have no ability to pursue any securities included in the S&P 500 Index itself for payment. If Wells Fargo Finance LLC or Wells Fargo & Company defaults on their obligations, investors could lose some or all of their investment. The supplement notes that the securities are not savings accounts, deposits, or other obligations of a depository institution and are not insured by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund, or any other governmental agency.

The filing makes clear that investors rely entirely on the creditworthiness of the Wells Fargo entities for repayment. Unlike conventional debt securities issued by Wells Fargo, these structured products provide no periodic interest payments and depend solely on the contingent maturity payment amount tied to market performance. The guarantor structure, while adding Wells Fargo & Company's credit standing to the transaction, does not eliminate the fundamental credit exposure inherent in any unsecured financial obligation.

Pricing, Valuation, and Agent Discount Structure

The original offering price is $1,000 per security, with Wells Fargo Securities, LLC serving as the agent for distribution and acting as principal. The filing discloses an agent discount of $6.50 per security, resulting in net proceeds to Wells Fargo Finance LLC of $993.50 per security. The estimated value of the securities at the time of the filing is approximately $988.40 per security. The filing states that this estimated value was determined by Wells Fargo Securities, LLC using its proprietary pricing models and is not an indication of actual profit to Wells Fargo Securities or other affiliates, nor does it represent a price at which Wells Fargo Securities or any other person may be willing to buy the securities from investors at any time after issuance.

The disclosure specifies that while the estimated value of the securities at pricing may differ from the value set forth in the supplement, Wells Fargo does not expect the difference to be significant absent a material change in market conditions or other relevant factors. Critically, the filing states that in no event will the estimated value of the securities on the pricing date be less than $958.40 per security. This valuation floor appears to reflect the structured parameters of the product, though investors should recognize that estimated value and potential secondary market pricing may diverge significantly.

Timeline and Settlement Parameters for the Two-Year Term

The filing establishes a precise timeline for the offering and the security's term. The pricing date is set for July 30, 2026, with the issue date following on August 4, 2026. The stated maturity date is August 3, 2028, subject to postponement. The calculation day, on which the ending value of the S&P 500 will be determined, is July 31, 2028, also subject to postponement. The filing notes that the calculation day is subject to postponement due to non-trading days and the occurrence of a market disruption event. If the calculation day is postponed, the stated maturity date will likewise be postponed and adjusted for non-business days.

The two-year investment horizon gives investors exposure to approximately 24 months of S&P 500 performance. The disclosure indicates that the securities are not subject to early redemption by Wells Fargo Finance LLC or repayment at the option of any security holder prior to the stated maturity date. This feature means investors cannot exit the structured product prior to maturity unless they locate a willing buyer in the secondary market, which may be limited given the securities are not exchange listed and are designed to be held to maturity.

Regulatory Filing Status and Disclosure Requirements

The preliminary pricing supplement is filed pursuant to Securities and Exchange Commission Rule 424(b)(2) under registration numbers 333-292881 and 333-292881-01. The supplement is subject to completion and was dated July 24, 2026, with the document bearing a "subject to completion" legend indicating that certain final terms may be adjusted. The filing references accompanying product supplement no. 1 dated February 13, 2026, market measure supplement no. 1 dated February 13, 2026, prospectus supplement dated February 13, 2026, and prospectus dated February 13, 2026. These supporting documents contain additional detailed risk disclosures and general terms governing the securities.

The filing includes the standard SEC regulatory disclaimer that neither the Securities and Exchange Commission nor any state securities commission or other regulatory body has approved or disapproved of the securities or passed upon the accuracy or adequacy of the disclosure documents. The filing emphasizes that any representation to the contrary would constitute a criminal offense. The preliminary nature of the pricing supplement means that final terms, including the exact maximum upside return percentage and certain other parameters, remain subject to determination on the actual pricing date.

Downside Buffer Mechanism and Loss Scenarios

The 15% downside buffer represents a key feature that distinguishes these securities from direct index exposure. The filing defines the threshold value as 85% of the starting value, meaning that index losses up to 15% trigger the buffered downside participation structure. Under this scenario, if the S&P 500 falls 10%, investors do not lose 10% but instead receive a positive return of 50% of the 10% decline, or 5%, resulting in a net gain of 5% above face amount. This mechanism provides asymmetric protection within the defined buffer range and reflects the premium pricing built into the estimated value.

However, once losses exceed 15%, the protection evaporates entirely. The filing states that if the ending value falls below the threshold value of 85% of the starting value, investors will have 1-to-1 downside exposure to the decrease in excess of the buffer amount. This means a 20% index decline results in a 5% loss for investors, a 30% decline results in a 15% loss, and a 50% decline results in a 35% loss. The filing explicitly warns that investors may lose up to 85% of the face amount, which would occur if the S&P 500 fell to 0% of starting value, an extreme but theoretically possible scenario.

Complex Feature Disclosure and Risk Acknowledgment

The filing emphasizes that these securities have complex features and that investing in them involves risks not associated with an investment in conventional debt securities. The disclosure directs investors to the "Selected Risk Considerations" section beginning on page PRS-9 of the pricing supplement and the "Risk Factors" section beginning on page PS-5 of the accompanying product supplement for comprehensive risk detail. The preliminary nature of the supplement means that final risk disclosures and additional risk factors may be expanded or clarified in the final pricing supplement filed upon completion of the offering.

The filing acknowledges that the securities are principal at risk instruments, a classification that signals to investors that their initial capital may not be fully returned. Unlike conventional medium-term notes that typically return 100% of principal at maturity plus periodic coupons, these structured securities return an amount that could be substantially less than the original $1,000 face amount depending on index performance. The absence of periodic interest payments or dividends means investors have no interim cash flow to offset potential principal loss, and the lack of exchange listing further limits secondary market liquidity options.

Product Supplement Framework and Additional Terms

The filing incorporates by reference multiple supporting documents that establish the complete terms and conditions governing the securities. The product supplement no. 1, dated February 13, 2026, contains general terms for securities linked to indices, including definitions of closing level, market disruption events, and adjustment procedures. The market measure supplement no. 1, dated February 13, 2026, provides specific details regarding the S&P 500 Index and how its performance will be measured and calculated throughout the security's term. The prospectus supplement and base prospectus dated February 13, 2026 contain standard disclosure regarding Wells Fargo Finance LLC as issuer and Wells Fargo & Company as guarantor.

These supporting documents establish the procedural framework for how the maturity payment amount will be calculated, how market disruption events will be handled, and how postponement of the calculation day will affect the stated maturity date and payment schedule. The disclosure indicates that closing value is defined in the product supplement and references the closing level of the S&P 500 Index on the applicable dates. Investors should review all four accompanying documents to fully understand the product mechanics, potential adjustments, and complete risk factors before making an investment decision.

Investment Suitability and Estimated Value Considerations

The estimated value of approximately $988.40 per security represents Wells Fargo Securities' calculation of theoretical fair value using proprietary pricing models at the time of the filing. This estimated value is substantially less than the $1,000 original offering price, a gap that reflects the value extraction by Wells Fargo for structuring, issuing, distributing, and guaranteeing the securities. The filing explicitly disclaims that the estimated value represents any actual profit to Wells Fargo Securities or other affiliates or indicates a price at which Wells Fargo Securities would be willing to purchase the securities from investors in the secondary market at any time after issuance.

The valuation floor of $958.40 per security on the pricing date provides limited downside guidance, as this figure still represents an approximately $41.60 per security, or 4.16%, discount to the $1,000 original offering price. Investors should consider that they are purchasing a security whose estimated value is below face amount and that comprises complex contingent return mechanics. The pricing methodology, discount structure, and valuation parameters are disclosed to inform investors that a meaningful portion of the initial purchase price represents embedded issuer compensation rather than an investment in an instrument trading at par value.

Index Performance Measurement and Return Calculation Mechanics

The underlier return calculation is straightforward: the percentage change from starting value to ending value, measured as (ending value minus starting value) divided by starting value. The filing provides a worked example stating that if the underlier return equals negative 5%, the absolute value of the underlier return would be positive 5%. This clarification ensures investors understand that the downside participation rate of 50% applies to the absolute magnitude of index declines. When the index falls 10%, the absolute value of the return is 10%, and 50% participation yields a 5% positive return above face amount under the buffered scenario.

The upside participation rate of 100% means investors capture the full percentage gain in the S&P 500, subject to the maximum upside return cap of at least 26.55%. If the S&P 500 appreciates 35%, investors receive only the capped 26.55% return, not the full 35%. This asymmetry—full upside participation to a 26.55% cap but full downside exposure beyond 15% buffer—creates a payoff profile that favors moderate market appreciation while providing limited protection against sharp declines. The filing makes clear that investors who anticipate substantial market gains are capped in their returns, while those who experience moderate losses retain the buffered participation benefit.