What is the main purpose of this 8-K filing?

This 8-K filing primarily announces the official establishment of U.S. Bancorp's Series B Non-Cumulative Perpetual Preferred Stock and the successful closing of a significant offering of Depositary Shares representing ownership in this preferred stock. It also details a Replacement Capital Covenant related to this issuance.

What are Depositary Shares and how do they relate to the Preferred Stock?

Depositary Shares are a convenient way for investors to hold fractional interests in more expensive or less easily traded securities. In this case, each Depositary Share represents a 1/1,000th ownership interest in one share of U.S. Bancorp's Series B Non-Cumulative Perpetual Preferred Stock.

What is a Replacement Capital Covenant (RCC) and what does it mean for investors?

A Replacement Capital Covenant is an agreement that restricts a company from redeeming or repurchasing certain classes of its equity or debt unless specific conditions are met, typically involving the issuance of new capital. For investors, the RCC in this filing indicates that U.S. Bancorp has committed to maintaining this Series B Preferred Stock as part of its capital structure for an extended period, as it limits the company's flexibility to retire it, unless it's replaced by other qualified capital.

What are the key terms of the Series B Non-Cumulative Perpetual Preferred Stock?

The Series B Non-Cumulative Perpetual Preferred Stock has a par value of $1.00 per share and a liquidation preference of $25,000 per share. It is non-cumulative, meaning dividends are not guaranteed to be paid if declared by the board, and perpetual, meaning it has no maturity date.

US BANCORP \DE\ 8-K: Corporate Changes

Summary

U.S. Bancorp (USB) filed an 8-K on March 27, 2006, detailing significant actions related to its capital structure. The company amended its Certificate of Incorporation to establish the terms of its Series B Non-Cumulative Perpetual Preferred Stock. This filing confirms the completion of a substantial offering of Depositary Shares, each representing a fraction of this newly designated preferred stock, which closed on March 27, 2006. These actions are crucial for investors to understand as they impact the company's financial leverage and shareholder structure. The issuance of preferred stock, especially on this scale, is often undertaken to strengthen capital ratios or fund growth initiatives. The accompanying Replacement Capital Covenant imposes restrictions on the company's ability to redeem or repurchase this preferred stock, indicating a long-term commitment to this capital component and providing a degree of protection for existing debtholders.

Key Highlights

1U.S. Bancorp filed a Certificate of Designations on March 24, 2006, to establish the Series B Non-Cumulative Perpetual Preferred Stock.
2The company closed the sale of 40,000,000 Depositary Shares, representing ownership in the Series B Preferred Stock, on March 27, 2006.
3Each Depositary Share represents 1/1,000th of a share of the Series B Preferred Stock, with a liquidation preference of $25,000 per share of preferred stock.
4The offering of Depositary Shares was made under a registration statement declared effective in May 2005.
5U.S. Bancorp entered into a Replacement Capital Covenant (RCC) on March 27, 2006.
6The RCC restricts the company's ability to redeem or repurchase the Series B Preferred Stock unless certain conditions, such as using proceeds from qualified securities, are met.
7This filing includes various exhibits such as underwriting agreements, the Certificate of Designations, a Deposit Agreement, and the Replacement Capital Covenant.

US BANCORP \DE\ 8-K Report, Bylaw Amendment (Mar 27, 2006)

Summary

Key Highlights

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