MINNEAPOLIS, May 10, 2010 (BUSINESS WIRE) --U.S. Bancorp (NYSE: USB) announced today that it has commenced an offer
to exchange (the "Exchange Offer") up to 1,250,000 of its depositary
shares (the "Depositary Shares"), representing a 1/100th
ownership interest in a share of U.S. Bancorp's Series A Non-Cumulative
Perpetual Preferred Stock, $100,000 liquidation preference per share
(the "Preferred Stock") for any and all of the 1,250,000 outstanding
6.189% Fixed-to-Floating Rate Normal ITS (the "Normal ITS") issued by
USB Capital IX. The liquidation amount of Depositary Shares issued in
the Exchange Offer will equal the liquidation amount of Normal ITS
tendered and accepted for exchange.
Holders of Normal ITS who elect to participate in the Exchange Offer
will receive non-cumulative dividends on the Depositary Shares, if
declared, at a rate of 7.189% per annum, while holders who do not elect
to participate will continue to receive distributions on the Normal ITS
at a rate of 6.189% per annum, until the later of April 15, 2011 and the
stock purchase date under the stock purchase contract forming part of
the Normal ITS.
The purpose of the Exchange Offer is to improve U.S. Bancorp's capital
structure by replacing the Normal ITS, which are hybrid securities, with
the Preferred Stock, which is a more traditional form of equity capital.
In addition, by retiring the junior subordinated notes that correspond
to the Normal ITS (the "Underlying Notes") acquired in the Exchange
Offer, U.S. Bancorp believes it will facilitate any future remarketing
of the remaining Underlying Notes.
Concurrent with the Exchange Offer, U.S. Bancorp is also soliciting (the
"Consent Solicitation") consents ("Consents") from holders of at least a
majority in liquidation amount of the Normal ITS (which corresponds to
at least a majority of the Normal ITS) to proposed amendments to the
trust documents related to the Normal ITS, the indenture pursuant to
which the Underlying Notes were issued and related documents, that would
allow U.S. Bancorp to retire the Normal ITS acquired in the Exchange
Offer and cancel the corresponding Underlying Notes and stock purchase
contracts, extend the period during which the Underlying Notes could be
remarketed from one to 30 days, and allow U.S. Bancorp to remarket the
Underlying Notes in two or more series having different stated
maturities, interest rates, denominations and interest payment dates
(the "Proposed Amendments").
Holders of Normal ITS who elect to participate in the Exchange Offer
will be deemed to have delivered Consents. Holders who do not exchange
may opt to deliver Consents and receive a fee of $1.25 for each
consented Normal ITS ($1,000 liquidation amount) if the requisite
Consents are received to approve the Proposed Amendments and the
Proposed Amendments become operative.
U.S. Bancorp filed a registration statement on Form S-4 (as it may be
amended from time to time, the "Registration Statement") with the
Securities and Exchange Commission ("SEC") on May 10, 2010, relating to
the Exchange Offer and the Consent Solicitation. The Registration
Statement has not yet become effective and the Depositary Shares may not
be issued, nor may the Exchange Offer or Consent Solicitation be
completed, until such time as the Registration Statement has been
declared effective by the SEC and is not subject to a stop order or any
proceedings for that purpose.
The Exchange Offer is not conditioned on any minimum principal amount of
Normal ITS being tendered. However, the Exchange Offer is subject to
certain conditions, including the conditions that the Registration
Statement, of which the Prospectus forms a part, has been declared
effective by the SEC and the continued listing of the Normal ITS on the
New York Stock Exchange after the consummation of the Exchange Offer,
and is also subject to the condition that U.S. Bancorp shall have
received valid Consents to the Proposed Amendments from holders of at
least a majority in aggregate liquidation amount of the outstanding
Normal ITS, each as more fully described in the Prospectus. Subject to
applicable law, U.S. Bancorp has the right to terminate or withdraw the
Exchange Offer and the Consent Solicitation if any of the conditions
described in the Prospectus are not satisfied or waived, or otherwise to
amend the Exchange Offer and the Consent Solicitation.
The Exchange Offer and related Consent Solicitation will expire at 11:59
p.m., New York City time, on June 7, 2010, unless U.S. Bancorp extends
it or terminates it early (such date and time, as it may be extended,
the "Expiration Date"). Any tendered Normal ITS and delivered Consents
may be withdrawn at any time prior to the Expiration Date.
Deutsche Bank Securities Inc. is acting as lead dealer manager and
structuring advisor and U.S. Bancorp Investments, Inc. is acting as
co-dealer manager in connection with the Exchange Offer and Consent
U.S. Bancorp urges holders to read the Preliminary Prospectus and
Consent Solicitation Statement relating to the Exchange Offer and the
Consent Solicitation prior to making a decision to tender any of their
Normal ITS or otherwise making an investment decision with respect to
the Depositary Shares and the underlying shares of Preferred Stock
because it contains important information regarding the Exchange Offer
and the Consent Solicitation.
Copies of the Preliminary Prospectus and Consent Solicitation Statement
relating to the Exchange Offer and the Consent Solicitation, which is
contained in the Registration Statement, and the related Letter of
Transmittal and Consent, will be made available to all holders of Normal
ITS free of charge and may be obtained from D.F. King & Co., Inc., the
Exchange Agent and Information Agent for the Exchange Offer and the
Consent Solicitation, at (800) 848-2998 (U.S. toll free) or (212)
269-5550. For additional information concerning the terms of the
Exchange Offer and Consent Solicitation, you may contact Deutsche Bank
Securities Inc. at (866) 627-0391 (U.S. toll free) or (212) 250-2955
(collect) or U.S. Bancorp Investments, Inc. at (877) 558-2607 (U.S. toll
free) or (612) 336-7609 (collect). The Prospectus and the related Letter
of Transmittal and Consent will also be available free of charge at the
SEC's website at www.sec.gov.
This press release is for informational purposes only and shall not
constitute an offer to sell or the solicitation of an offer to buy any
security, nor is it a solicitation for acceptance of the Exchange Offer.
U.S. Bancorp is making the Exchange Offer and Consent Solicitation only
by, and pursuant to the terms of, the Preliminary Prospectus and Consent
Solicitation Statement and related letter of transmittal and consent.
The Exchange Offer and the Consent Solicitation shall not constitute an
offer, solicitation or sale in any jurisdiction in which such offering,
solicitation or sale would be unlawful.
U.S. Bancorp (NYSE: USB), with $282 billion in assets as of March 31,
2010, is the parent company of U.S. Bank, the fifth largest commercial
bank in the United States. The company operates 3,025 banking offices in
24 states and 5,312 ATMs and provides a comprehensive line of banking,
brokerage, insurance, investment, mortgage, trust and payment services
products to consumers, businesses and institutions.
The following information appears in accordance with the Private
Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements about U.S.
Bancorp. Statements that are not historical or current facts, including
statements about beliefs and expectations, are forward-looking
statements and are based on the information available to, and
assumptions and estimates made by, management as of the date made. These
forward-looking statements cover, among other things, anticipated future
revenue and expenses and the future plans and prospects of U.S. Bancorp.
Forward-looking statements involve inherent risks and uncertainties, and
important factors could cause actual results to differ materially from
those anticipated. Global and domestic economies could fail to recover
from the recent economic downturn or could experience another severe
contraction, which could adversely affect U.S. Bancorp's revenues and
the values of its assets and liabilities. Global financial markets could
experience a recurrence of significant turbulence, which could reduce
the availability of funding to certain financial institutions and lead
to a tightening of credit, a reduction of business activity, and
increased market volatility. Stress in the commercial real estate
markets, as well as a delay or failure of recovery in the residential
real estate markets, could cause additional credit losses and
deterioration in asset values. In addition, U.S. Bancorp's business and
financial performance could be impacted as the financial industry
restructures in the current environment, by increased regulation of
financial institutions or other effects of recently enacted or future
legislation, and by changes in the competitive landscape. U.S. Bancorp's
results could also be adversely affected by continued deterioration in
general business and economic conditions; changes in interest rates;
deterioration in the credit quality of its loan portfolios or in the
value of the collateral securing those loans; deterioration in the value
of securities held in its investment securities portfolio; legal and
regulatory developments; increased competition from both banks and
non-banks; changes in customer behavior and preferences; effects of
mergers and acquisitions and related integration; effects of critical
accounting policies and judgments; and management's ability to
effectively manage credit risk, market risk, operational risk, legal
risk, and regulatory and compliance risk.
For discussion of these and other risks that may cause actual results to
differ from expectations, refer to U.S. Bancorp's Annual Report on Form
10-K for the year ended December 31, 2009, on file with the Securities
and Exchange Commission, including the sections entitled "Risk Factors"
and "Corporate Risk Profile" contained in Exhibit 13, and all subsequent
filings with the Securities and Exchange Commission under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
Forward-looking statements speak only as of the date they are made, and
U.S. Bancorp undertakes no obligation to update them in light of new
information or future events.
SOURCE: U.S. Bancorp
Judith T. Murphy, 612-303-0783
Steve Dale, 612-303-0784