By Stephanie N. Rotondo
Seattle, Feb. 2 – U.S. Bancorp priced a $1 billion benchmark offering of 5.3% $1,000-par series J fixed-to-floating rate noncumulative perpetual preferred stock (expected ratings: A3/BBB/BBB+/A) on Thursday, the company said in a prospectus filed with the Securities and Exchange Commission.
Initial price talk was 5.625% but was then revised to 5.35%, according to a market source. The deal then launched at 5.3%.
U.S. Bancorp Investments Inc., Barclays and Morgan Stanley & Co. LLC are the joint bookrunners.
The preferreds will be issued as depositary shares representing a 1/25th interest.
Dividends will be fixed and payable semiannually through April 15, 2027. At that time, the rate will begin to float at Libor plus 291.4 basis points and will be payable quarterly.
The issue becomes redeemable April 15, 2027 at par plus accrued dividends. The preferreds can also be redeemed prior to that date, in whole, upon a regulatory capital treatment event.
Proceeds will be used for general corporate purposes, which may include the redemption of the 6% series G fixed-to-floating rate noncumulative preferred stock (NYSE: USBPrN).
U.S. Bancorp is a Minneapolis-based financial holding company.
| Issuer: | U.S. Bancorp
|
| Securities: | Series J fixed-to-floating rate noncumulative preferred stock
|
| Amount: | $1 billion
|
| Maturity: | Perpetual
|
| Bookrunners: | U.S. Bancorp Investments Inc., Barclays, Morgan Stanley & Co. LLC
|
| Dividend: | Fixed at 5.3% until April 15, 2027, then floating at Libor plus 291.4 bps
|
| Price: | Par of $1,000
|
| Yield: | 5.3%
|
| Talk: | Initially at 5.625%, then revised to 5.35%
|
| Call options: | On or after April 15, 2027 or upon a regulatory capital treatment event at par plus accrued dividends
|
| Pricing date: | Feb. 2
|
| Settlement date: | Feb. 13
|
| Expected ratings: | Moody’s: A3
|
| S&P: BBB
|
| Fitch: BBB+
|
| DBRS: A
|
| Cusip: | 902973AZ9
|
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