Business Context and Reporting Period
U.S. Bancorp filed a Form 8-K on April 18, 2012, reporting the redemption of specific trust preferred securities. The filing details actions taken to align with the company's capital plan submitted to the Federal Reserve Board.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or general liquidity metrics. It specifically addresses the redemption of the following trust preferred securities at a price of $25 per security plus accrued distributions:
- USB Capital XI: 6.60% Trust Preferred Securities with a principal amount of $765,000,000.
- USB Capital XII: 6.30% Trust Preferred Securities with a principal amount of $535,000,000.
Total principal amount subject to redemption is $1,300,000,000.
Material Changes
Upon notice of redemption, the identified trust preferred securities will no longer qualify as Tier 1 capital under applicable regulatory guidelines. The redemptions are scheduled for May 18, 2012.
Guidance, Outlook, and Management Commentary
Management states these redemptions are consistent with the capital plan submitted to the Federal Reserve Board. The redemptions will be funded in part by proceeds from a public offering of depositary shares representing an interest in the Company's Series G Non-Cumulative Perpetual Preferred Stock, which commenced on April 17, 2012. The USB Capital XI securities were callable after September 15, 2011, and USB Capital XII securities were callable after February 15, 2012.
Investor Verification Checklist
- Verify the successful completion of the Series G Non-Cumulative Perpetual Preferred Stock offering to ensure funding for the redemptions.
- Confirm the impact of the $1.3 billion redemption on the company's Tier 1 capital ratio.
- Review the specific terms of the Series G Preferred Stock offering to understand the cost of capital relative to the redeemed securities.