MINNEAPOLIS--(BUSINESS WIRE)--Sept. 14, 2006--U.S. Bancorp
(NYSE:USB) today announced that it priced a private placement of $2.5
billion aggregate principal amount of its floating rate convertible
senior debentures due 2036 (the "convertible debentures"). The
convertible debentures will bear interest at a floating rate equal to
three-month LIBOR minus 1.75 percent, payable quarterly in arrears.
The convertible debentures have an initial conversion rate
representing a 16 percent premium over U.S. Bancorp's closing common
stock price on September 14, 2006 of $33.00 per share. U.S. Bancorp
has granted the initial purchasers a 16-day option to purchase an
additional $375 million of the convertible debentures.
U.S. Bancorp will use a portion of the net proceeds from this
offering to fund repurchases of up to 10.2 million shares of its
common stock simultaneously with this offering and expects to use the
remainder for general corporate purposes, including possible
additional share repurchases.
If converted, holders of the convertible debentures will receive
cash up to the principal amount of a debenture and, if the market
price of U.S. Bancorp common stock exceeds the conversion price in
effect on the conversion date, holders will also receive a number of
shares of U.S. Bancorp common stock per convertible debenture as
determined pursuant to a specified formula, subject to U.S. Bancorp's
option to cash settle all or some of its delivery obligations.
U.S. Bancorp may redeem all or some of the convertible debentures
for cash at any time on or after September 20, 2007, at 100 percent of
their principal amount plus accrued and unpaid interest, if any, to
but not including the redemption date. On each of September 20, 2007,
2008, 2011, 2016, 2021, 2026 and 2031, or upon the occurrence of a
change in control, the holders of the convertible debentures may
require U.S. Bancorp to repurchase the convertible debentures for cash
at a price equal to 100 percent of the principal amount of the
debentures submitted for repurchase, plus accrued and unpaid interest,
if any, to but not including the repurchase date.
The offering is being made only to qualified institutional buyers
pursuant to Rule 144A of the Securities Act of 1933, as amended.
This announcement is neither an offer to sell nor the solicitation
of an offer to buy the convertible debentures or the shares issuable
upon conversion and shall not constitute an offer or solicitation in
any jurisdiction in which such offer or solicitation is unlawful.
Neither the convertible debentures nor the shares issuable upon
conversion have been registered under the Securities Act or any state
securities laws, and until so registered, may not be offered or sold
in the United States or any state absent registration or an applicable
exemption from the registration requirements of the Securities Act.
Minneapolis-based U.S. Bancorp, with $213 billion in assets, is
the 6th largest financial holding company in the United States. The
company operates 2,434 banking offices and 4,966 ATMs, and provides a
comprehensive line of banking, brokerage, insurance, investment,
mortgage, trust and payment services products to consumers, businesses
and institutions. U.S. Bancorp is the parent company of U.S. Bank.
Visit U.S. Bancorp at www.usbank.com.
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. These statements often include the words
"may," "could," "would," "should," "believes," "expects,"
"anticipates," "estimates," "intends," "plans," "targets,"
"potentially," "probably," "projects," "outlook" or similar
expressions. These forward-looking statements cover, among other
things, anticipated future revenue and expenses and the future plans
and prospects of the Company. Forward-looking statements involve
inherent risks and uncertainties, and important factors could cause
actual results to differ materially from those anticipated, including
changes in general business and economic conditions, changes in
interest rates, 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, and effects of critical accounting policies and
judgments. For discussion of these and other risks that may cause
actual results to differ from expectations, refer to our Annual Report
on Form 10-K for the year ended December 31, 2005, on file with the
SEC, for example the sections entitled "Risk Factors" and "Corporate
Risk Profile." Forward-looking statements speak only as of the date
they are made, and the Company undertakes no obligation to update them
in light of new information or future events.
CONTACT: U.S. Bancorp
Steve Dale, 612-303-0784
Judy Murphy, 612-303-0783
SOURCE: U.S. Bancorp