Summary
US Bancorp (USB) filed an 8-K on November 14, 2008, to disclose a significant material definitive agreement with the U.S. Department of the Treasury under the Troubled Asset Relief Program (TARP) Capital Purchase Program. The company issued $6.599 billion in cash in exchange for 6.599 million shares of Series E Fixed Rate Cumulative Perpetual Preferred Stock and a warrant to purchase over 32.6 million shares of common stock at an initial exercise price of $30.29 per share. This transaction represents a substantial capital infusion intended to strengthen the company's financial position during a period of market stress. The agreement imposes certain restrictions on US Bancorp, including limitations on dividend payments exceeding the current quarterly rate, equity redemptions, and executive compensation. The filing also includes the Certificate of Designations for the newly issued preferred stock series.
Key Highlights
- 1US Bancorp entered into a material definitive agreement with the U.S. Department of the Treasury under the TARP Capital Purchase Program on November 14, 2008.
- 2The company received $6.599 billion in cash from the U.S. Treasury.
- 3In exchange for the capital, US Bancorp issued 6.599 million shares of Series E Fixed Rate Cumulative Perpetual Preferred Stock.
- 4A warrant was issued to the U.S. Treasury to purchase up to 32,679,102 shares of US Bancorp common stock at an initial exercise price of $30.29 per share.
- 5The agreement imposes limitations on dividend payments, equity redemptions, and executive compensation.
- 6The Certificate of Designations for the Series E Preferred Stock was filed on November 13, 2008, effective immediately upon filing.