Summary
U.S. Bancorp (USB) filed an 8-K on August 9, 2011, to announce the redemption of two series of its trust preferred securities: USB Capital VI 5.75% Trust Preferred Securities and USB Capital VII 5.875% Trust Preferred Securities. The total principal amount being redeemed is $575 million ($275 million and $300 million, respectively). These securities will be redeemed on September 8, 2011, at a price of $25 per security plus any accrued and unpaid distributions. This redemption is significant as these trust preferred securities will no longer qualify as Tier 1 capital for U.S. Bancorp under applicable regulatory guidelines following the notice of redemption. The company stated that these actions are in line with its capital plan submitted to the Federal Reserve Board and will be funded from its general corporate reserves. Investors holding these specific trust preferred securities should note the redemption date and the terms of the redemption.
Key Highlights
- 1U.S. Bancorp is redeeming $575 million in trust preferred securities.
- 2The redemption includes USB Capital VI 5.75% Trust Preferred Securities ($275M) and USB Capital VII 5.875% Trust Preferred Securities ($300M).
- 3The redemption date for both series of securities is September 8, 2011.
- 4Securities will be redeemed at $25 per security, plus accrued and unpaid distributions.
- 5Upon redemption notice, these securities will no longer qualify as Tier 1 capital for the company under regulatory guidelines.
- 6The redemptions are part of the company's capital plan submitted to the Federal Reserve Board.
- 7The redemptions will be funded by U.S. Bancorp's general corporate reserves.