U.S. Bancorp $2 billion 30-year convertibles talked to yield Libor minus 1.46%, up 20%

By Rebecca Melvin

Princeton, N.J., Dec. 5 - U.S. Bancorp was expected to price Tuesday before the open $2 billion of 30-year floating-rate convertible senior debentures, according to a syndicate source.

The Rule 144A deal, launched after the close Monday, was talked to yield a floating rate equal to three-month Libor minus 1.46%, with an initial conversion premium of 20%, the source said.

Although terms have been fixed, the reoffer price has not yet been set, according to a syndicate source.

Citigroup and Deutsche Bank were joint bookrunners for the debentures, which will have a 13-day option to purchase an additional $500 million.

The debentures are non-callable for one year and have the first put at year one. On each of Dec. 11, 2006, March 11, 2007, June 11, 2007 and Sept. 11, 2007 and Dec. 11, 2007, 2010, 2015, 2020, 2025 and 2030, or upon the occurrence of a change in control, the holders of the convertible debentures may require U.S. Bancorp to repurchase the convertibles for cash.

Minneapolis-based U.S. Bancorp is the sixth largest U.S. financial holding company.

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