The information in this preliminary pricing supplement is not
complete and may be changed. This preliminary pricing supplement is
not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
Subject to completion dated March 22, 2023
|
Pricing supplement
To prospectus dated April 8,
2020,
prospectus supplement dated April 8, 2020 and
product supplement no. 1-II dated November 4, 2020
|
Registration Statement Nos. 333-236659 and 333-236659-01
Dated March , 2023
Rule 424(b)(2)
|
|
JPMorgan Chase Financial Company LLC |
|
$
Callable Fixed Rate Notes due April 23, 2024
|
Fully and Unconditionally Guaranteed by JPMorgan Chase &
Co.
General
|
· |
The notes are unsecured and unsubordinated obligations of
JPMorgan Chase Financial Company LLC, which we refer to as JPMorgan
Financial, the payment on which is fully and unconditionally
guaranteed by JPMorgan Chase & Co. Any payment on the notes
is subject to the credit risk of JPMorgan Financial, as issuer of
the notes, and the credit risk of JPMorgan Chase & Co., as
guarantor of the notes. |
|
· |
These notes are designed for an investor who seeks a fixed
income investment at an interest rate of 5.00% per annum but who is
also willing to accept the risk that the notes will be called prior
to the Maturity Date. |
|
· |
At our option, we may redeem the notes, in whole but not in
part, on any of the Redemption Dates specified below. |
|
· |
The notes may be purchased in minimum denominations of $1,000
and in integral multiples of $1,000 thereafter. |
Key Terms
|
Issuer: |
JPMorgan Chase Financial Company LLC, an
indirect, wholly owned finance subsidiary of JPMorgan Chase &
Co. |
| Guarantor: |
JPMorgan Chase & Co. |
| Payment at Maturity: |
On the Maturity Date, we will pay you the principal
amount of your notes plus any accrued and unpaid interest,
provided that your notes are outstanding and have not
previously been called on any Redemption Date. |
| Call Feature: |
On September 23, 2023, December 23, 2023 and March
23, 2024 (each, a “Redemption Date”), we may redeem your notes, in
whole but not in part, at a price equal to the principal amount
being redeemed plus any accrued and unpaid interest, subject
to the Business Day Convention and the Interest Accrual Convention
described below and in the accompanying product
supplement. If we intend to redeem your notes, we will
deliver notice to The Depository Trust Company on any business day
after the Original Issue Date that is at least 5 business days
before the applicable Redemption Date. |
| Interest: |
Subject
to the Interest Accrual Convention, with respect to each Interest
Period, for each $1,000 principal amount note, we will pay you
interest in arrears on each Interest Payment Date in accordance
with the following formula:
$1,000 × Interest Rate × Day Count Fraction.
|
| Interest
Periods: |
The period
beginning on and including the Original Issue Date and ending on
but excluding the first Interest Payment Date, and each successive
period beginning on and including an Interest Payment Date and
ending on but excluding the next succeeding Interest Payment Date
or, if the notes are redeemed prior to that succeeding Interest
Payment Date, ending on but excluding the applicable Redemption
Date, subject to the Interest Accrual Convention described below
and in the accompanying product supplement |
| Interest
Payment Dates: |
Interest on
the notes will be payable in arrears on September 23, 2023, March
23, 2024 and the Maturity Date (each, an “Interest Payment Date”),
subject to any earlier redemption and the Business Day Convention
and Interest Accrual Convention described below and in the
accompanying product supplement. |
| Interest
Rate: |
5.00% per
annum |
| Pricing
Date: |
March 22,
2023, subject to the Business Day Convention |
| Original
Issue Date: |
March 23,
2023, subject to the Business Day Convention (Settlement Date) |
| Maturity
Date: |
April 23,
2024, subject to the Business Day Convention |
| Business Day
Convention: |
Following |
| Interest
Accrual Convention: |
Unadjusted |
| Day Count
Convention: |
30/360 |
| CUSIP: |
48133U5A6 |
Investing in the notes involves a number of risks. See “Risk
Factors” beginning on page S-2 of the accompanying prospectus
supplement, “Risk Factors” beginning on page PS-11 of the
accompanying product supplement and “Selected Risk Considerations”
beginning on page PS-3 of this pricing supplement.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state
securities commission has approved or disapproved of the notes or
passed upon the accuracy or the adequacy of this pricing supplement
or the accompanying product supplement, prospectus supplement and
prospectus. Any representation to the contrary is a criminal
offense.
|
|
Price to Public(1) |
Fees and Commissions(2) |
Proceeds to Issuer |
|
Per note |
$1,000 |
$ |
$ |
|
Total |
$ |
$ |
$ |
(1) The
price to the public includes the estimated cost of hedging our
obligations under the notes through one or more of our
affiliates.
(2)
J.P. Morgan Securities LLC, which we refer to as JPMS, acting as
agent for JPMorgan Financial, will pay all of the selling
commissions it receives from us to other affiliated or unaffiliated
dealers. In no event will these selling commissions exceed $7.50
per $1,000 principal amount note. See “Plan of Distribution
(Conflicts of Interest)” in the accompanying product
supplement.
The notes are not bank deposits, are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency and
are not obligations of, or guaranteed by, a bank.
Additional Terms Specific to the Notes
You
may revoke your offer to purchase the notes at any time prior to
the time at which we accept such offer by notifying the applicable
agent. We reserve the right to change the terms of, or reject any
offer to purchase, the notes prior to their issuance. In the event
of any changes to the terms of the notes, we will notify you and
you will be asked to accept such changes in connection with your
purchase. You may also choose to reject such changes in which case
we may reject your offer to purchase.
You
should read this pricing supplement together with the accompanying
prospectus, as supplemented by the accompanying prospectus
supplement, relating to our Series A medium-term notes of which
these notes are a part, and the more detailed information contained
in the accompanying product supplement. This pricing supplement,
together with the documents listed below, contains the terms of the
notes and supersedes all other prior or contemporaneous oral
statements as well as any other written materials including
preliminary or indicative pricing terms, correspondence, trade
ideas, structures for implementation, sample structures, fact
sheets, brochures or other educational materials of ours. You
should carefully consider, among other things, the matters set
forth in the “Risk Factors” sections of the accompanying prospectus
supplement and the accompanying product supplement, as the notes
involve risks not associated with conventional debt securities. We
urge you to consult your investment, legal, tax, accounting and
other advisers before you invest in the notes.
You
may access these documents on the SEC website at www.sec.gov as
follows (or if such address has changed, by reviewing our filings
for the relevant date on the SEC website):
|
· |
Product supplement no. 1-II dated November 4, 2020: |
http://www.sec.gov/Archives/edgar/data/19617/000095010320021464/crt_dp139380.pdf
|
· |
Prospectus supplement and prospectus, each dated April 8,
2020: |
http://www.sec.gov/Archives/edgar/data/19617/000095010320007214/crt_dp124361-424b2.pdf
Our Central Index Key, or CIK, on the SEC website is 1665650, and
JPMorgan Chase & Co.’s CIK is 19617. As used in this pricing
supplement, “we,” “us” and “our” refer to JPMorgan Financial.
|
Callable Fixed Rate Notes |
PS-2
|
Selected Purchase Considerations
|
· |
PRESERVATION OF CAPITAL AT MATURITY OR UPON REDEMPTION —
We will pay you at least the principal amount of your notes if you
hold the notes to maturity or to the Redemption Date, if any, on
which we elect to call the notes. Because the notes are our
unsecured and unsubordinated obligations, the payment of which is
fully and unconditionally guaranteed by JPMorgan Chase & Co.,
payment of any amount on the notes is subject to our ability to pay
our obligations as they become due and JPMorgan Chase & Co.’s
ability to pay its obligations as they become due. |
|
· |
PERIODIC INTEREST PAYMENTS — The notes offer periodic
interest payments on each Interest Payment Date at the Interest
Rate, subject to any earlier redemption, and, if the notes are
redeemed on a Redemption Date that is not an Interest Payment Date,
on the applicable Redemption Date at the applicable Interest Rate.
Interest, if any, will be paid in arrears on each Interest Payment
Date occurring before any Redemption Date on which the notes are
redeemed and, if so redeemed, on that Redemption Date to the
holders of record at the close of business on the business day
immediately preceding the applicable Interest Payment Date. The
interest payments will be based on the Interest Rate listed on the
cover of this pricing supplement. The yield on the notes may be
less than the overall return you would receive from a conventional
debt security that you could purchase today with the same maturity
as the notes. |
|
· |
POTENTIAL PERIODIC REDEMPTION BY US AT OUR OPTION — At
our option, we may redeem the notes, in whole but not in part, on
any of the Redemption Dates set forth on the cover of this pricing
supplement, at a price equal to the principal amount being redeemed
plus any accrued and unpaid interest, subject to the
Business Day Convention and the Interest Accrual Convention
described on the cover of this pricing supplement and in the
accompanying product supplement. Any accrued and unpaid interest on
the notes redeemed will be paid to the person who is the holder of
record of these notes at the close of business on the business day
immediately preceding the applicable Redemption Date. Even in cases
where the notes are called before maturity, noteholders are not
entitled to any fees or commissions described on the front cover of
this pricing supplement. |
Selected Risk Considerations
An
investment in the notes involves significant risks. These risks are
explained in more detail in the “Risk Factors” sections of the
accompanying prospectus supplement and the accompanying product
supplement.
Risks Relating to the Notes Generally
|
· |
WE MAY CALL YOUR NOTES PRIOR TO THEIR SCHEDULED MATURITY
DATE — We may choose to call the notes early or choose not to
call the notes early on any Redemption Date in our sole discretion.
If the notes are called early, you will receive the principal
amount of your notes plus any accrued and unpaid interest
to, but excluding, the applicable Redemption Date. The aggregate
amount that you will receive through and including the applicable
Redemption Date will be less than the aggregate amount that you
would have received had the notes not been called early. If we call
the notes early, your overall return may be less than the yield
that the notes would have earned if you held your notes to maturity
and you may not be able to reinvest your funds at the same rate as
the original notes. We may choose to call the notes early, for
example, if U.S. interest rates decrease or do not rise
significantly or if volatility of U.S. interest rates decreases
significantly. |
|
· |
CREDIT RISKS OF
JPMORGAN FINANCIAL AND JPMORGAN CHASE & CO. — The notes are
subject to our and JPMorgan Chase & Co.’s credit risks, and our
and JPMorgan Chase & Co.’s credit ratings and credit spreads
may adversely affect the market value of the notes. Investors are
dependent on our and JPMorgan Chase & Co.’s ability to pay all
amounts due on the notes. Any actual or potential change in our or
JPMorgan Chase & Co.’s creditworthiness or credit spreads, as
determined by the market for taking that credit risk, is likely to
adversely affect the value of the notes. If we and JPMorgan Chase
& Co. were to default on our payment obligations, you may not
receive any amounts owed to you under the notes and you could lose
your entire investment. |
|
· |
AS A FINANCE
SUBSIDIARY, JPMORGAN FINANCIAL HAS NO INDEPENDENT OPERATIONS AND
HAS LIMITED ASSETS — As a finance subsidiary of JPMorgan Chase
& Co., we have no independent operations beyond the issuance
and administration of our securities. Aside from the initial
capital contribution from JPMorgan Chase & Co., substantially
all of our assets relate to obligations of our affiliates to make
payments under loans made by us or other intercompany agreements.
As a result, we are dependent upon payments from our affiliates to
meet our obligations under the notes. If these affiliates do not
make payments to us and we fail to make payments on the notes, you
may have to seek payment under the related guarantee by JPMorgan
Chase & Co., and that guarantee will rank pari passu
with all other unsecured and unsubordinated obligations of JPMorgan
Chase & Co. |
|
· |
REINVESTMENT RISK — If we redeem the notes, the term of
the notes may be reduced and you will not receive interest payments
after the applicable Redemption Date. There is no guarantee that
you would be able to reinvest the proceeds from an investment in
the notes at a comparable return and/or with a comparable interest
rate for a similar level of risk in the event the notes are
redeemed prior to the Maturity Date. |
|
· |
LACK OF LIQUIDITY — The notes will not be listed on any
securities exchange. JPMS intends to offer to purchase the notes in
the secondary market but is not required to do so. Even if there is
a secondary market, it may not provide enough liquidity to allow
you to trade or sell the notes easily. Because other dealers
are |
|
Callable Fixed Rate Notes |
PS-3
|
not likely to make a secondary market for the notes, the price at
which you may be able to trade your notes is likely to depend on
the price, if any, at which JPMS is willing to buy the notes.
Risks Relating to Conflicts of Interest
|
· |
POTENTIAL
CONFLICTS — We and our affiliates play a variety of roles in
connection with the issuance of the notes, including acting as
calculation agent and as an agent of the offering of the notes and
hedging our obligations under the notes. In performing these
duties, our and JPMorgan Chase & Co.’s economic interests and
the economic interests of the calculation agent and other
affiliates of ours are potentially adverse to your interests as an
investor in the notes. In addition, our and JPMorgan Chase &
Co.’s business activities, including hedging and trading activities
for our and JPMorgan Chase & Co.’s own accounts or on behalf of
customers, could cause our and JPMorgan Chase & Co.’s economic
interests to be adverse to yours and could adversely affect any
payment on the notes and the value of the notes. It is possible
that hedging or trading activities of ours or our affiliates in
connection with the notes could result in substantial returns for
us or our affiliates while the value of the notes declines. Please
refer to “Risk Factors — Risks Relating to Conflicts of Interest”
in the accompanying product supplement for additional information
about these risks. |
Risks Relating to
Secondary Market Prices of the Notes
|
· |
CERTAIN BUILT-IN COSTS
ARE LIKELY TO AFFECT ADVERSELY THE VALUE OF THE NOTES PRIOR TO
MATURITY — While the payment at maturity described in this
pricing supplement is based on the full principal amount of your
notes, the original issue price of the notes includes the agent’s
commission and the estimated cost of hedging our obligations under
the notes through one or more of our affiliates. As a result, the
price, if any, at which JPMS will be willing to purchase notes from
you in secondary market transactions, if at all, will likely be
lower than the original issue price, and any sale prior to the
Maturity Date could result in a substantial loss to you. This
secondary market price will also be affected by a number of factors
aside from the agent’s commission and hedging costs, including
those referred to under “— Many Economic and Market Factors Will
Impact the Value of the Notes” below. |
The notes are not designed to
be short-term trading instruments. Accordingly, you should be able
and willing to hold your notes to maturity.
|
· |
MANY ECONOMIC AND
MARKET FACTORS WILL IMPACT THE VALUE OF THE NOTES — The notes
will be affected by a number of economic and market factors that
may either offset or magnify each other, including but not limited
to: |
|
· |
any actual or potential
change in our or JPMorgan Chase & Co.’s creditworthiness or
credit spreads; |
|
· |
the time to maturity of
the notes; |
|
· |
interest and yield rates
in the market generally, as well as the volatility of those rates;
and |
|
· |
the likelihood, or
expectation, that the notes will be redeemed by us, based on
prevailing market interest rates or otherwise. |
|
Callable Fixed Rate Notes |
PS-4
|
Hypothetical Examples of
Calculation of the Interest Payment on the Notes for an Interest
Period
The following examples
illustrate how the hypothetical Interest Payment for an Interest
Period is calculated if we choose to call the notes early or choose
not to call the notes early on any Redemption Date in our sole
discretion, assuming that, except as specified below, the Day Count
Fraction for the applicable Interest Period is equal to 180 / 360.
The actual Day Count Fraction for an Interest Period will be
calculated in the manner set forth in the accompanying product
supplement. The hypothetical Interest Payments in the following
examples are for illustrative purposes only and may not correspond
to the actual Interest Payments for any Interest Period applicable
to a purchaser of the notes. The numbers appearing in the following
examples have been rounded for ease of analysis.
Example 1: If we choose to
call the notes early on a Redemption Date and the Redemption Date
is December 23, 2023, we will pay you $1,000 for each $1,000
principal amount note plus any accrued and unpaid interest
at the Interest Rate of 5.00% per annum. Because the Redemption
Date occurs prior to the end of the Interest Period, that Interest
Period will now end on but exclude the Redemption Date. Therefore,
assuming the Day Count Fraction for this shortened Interest Period
is 90 / 360, the interest payment per $1,000 principal amount note
on the Redemption Date will be calculated as follows:
$1,000 × 5.00% × (90 / 360) =
$12.50
We will pay you a principal
payment of $1,000 for each $1,000 principal amount note on the
Redemption Date. Therefore, you will receive $1,012.50 for each
$1,000 principal amount note ($1,000 of principal plus
$12.50 of interest) on the Redemption Date, but you will not
receive any further interest or principal payments from
us.
Example 2: If we choose
not to call the notes early on any prior Redemption Date and on the
Redemption Date corresponding to the Interest Payment Date and the
Interest Payment Date is March 23, 2024, we will pay you any
accrued and unpaid interest on the applicable Interest Payment Date
at the Interest Rate of 5.00% per annum. Therefore, the interest
payment per $1,000 principal amount note will be calculated as
follows:
$1,000 × 5.00% × (180 / 360)
= $25.00
We will pay you an interest
payment of $25.00 for each $1,000 principal amount note on that
Interest Payment Date. Because the notes have not been called, you
will be entitled to receive additional interest payments until the
Maturity Date or, if the notes are redeemed earlier, the applicable
Redemption Date. You will also receive a payment of principal on
the Maturity Date or, if the notes are redeemed early, the
applicable Redemption Date.
Example 3: If we choose
not to call the notes prior to the Maturity Date and today
is the Maturity Date, we will pay you $1,000 for each $1,000
principal amount note plus any accrued and unpaid interest on the
Maturity Date at the Interest Rate of 5.00% per annum. Therefore,
assuming the Day Count Fraction for this shortened Interest Period
is 30 / 360, the interest payment per $1,000 principal amount note
on the Maturity Date will be calculated as follows:
$1,000 × 5.00% × (30 / 360) =
$4.1667
We will pay you a principal
payment of $1,000 for each $1,000 principal amount note on the
Maturity Date. Therefore, you will receive $1,004.1667 for each
$1,000 principal amount note ($1,000 of principal plus
$4.1667 of interest) on the Maturity Date, and you will not receive
any further interest or principal payments from us.
The hypothetical payments on
these notes shown above apply only if you hold the notes for
their entire term or until earlier redemption. These
hypotheticals do not reflect fees or expenses that would be
associated with any sale in the secondary market. If these fees and
expenses were included, the hypothetical payments shown above would
likely be lower.
|
Callable Fixed Rate Notes |
PS-5
|
Tax Treatment
You
should review carefully the section in the accompanying product
supplement no. 1-II entitled “Material U.S. Federal Income Tax
Consequences,” focusing particularly on the section entitled “— Tax
Consequences to U.S. Holders — Notes Treated as Debt Instruments
But Not Contingent Payment Debt Instruments — Notes Treated as Debt
Instruments That Provide for Fixed Interest Payments at a Single
Rate and That Are Not Issued at a Discount.” The following, when
read in combination with those sections, constitutes the full
opinion of our special tax counsel, Davis Polk & Wardwell LLP,
regarding the material U.S. federal income tax consequences of
owning and disposing of the notes. Our special tax counsel is of
the opinion that the notes will be treated as fixed-rate debt
instruments as defined and described therein.
Supplemental Information About the Form of the Notes
The
notes will initially be represented by a type of global security
that we refer to as a master note. A master note represents
multiple securities that may be issued at different times and that
may have different terms. The trustee and/or paying agent
will, in accordance with instructions from us, make appropriate
entries or notations in its records relating to the master note
representing the notes to indicate that the master note evidences
the notes.
|
Callable Fixed Rate Notes |
PS-6 |
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