Summary
U.S. Bancorp filed an 8-K on April 18, 2012, to announce the redemption of its USB Capital XI and USB Capital XII Trust Preferred Securities. These redemptions, totaling $1.3 billion ($765 million for Capital XI and $535 million for Capital XII), are scheduled for May 18, 2012. The securities will be redeemed at par ($25 per security) plus accrued distributions. This move is significant as these securities will no longer qualify as Tier 1 capital under current regulatory guidelines. The company stated that these redemptions are part of its capital plan submitted to the Federal Reserve Board. Funding for these redemptions will be partially derived from the proceeds of a Series G Non-Cumulative Perpetual Preferred Stock offering, which began on April 17, 2012. Investors should note this strategic capital management action as it impacts the company's capital structure and regulatory compliance.
Key Highlights
- 1U.S. Bancorp is redeeming $1.3 billion in Trust Preferred Securities.
- 2The redemption affects USB Capital XI (6.60%) and USB Capital XII (6.30%) series.
- 3Redemption date for both series is May 18, 2012.
- 4Securities will be redeemed at $25 per security plus accrued and unpaid distributions.
- 5These redeemed securities will no longer count towards U.S. Bancorp's Tier 1 capital.
- 6The redemption is aligned with the company's capital plan submitted to the Federal Reserve.
- 7Part of the funding will come from the recent Series G Preferred Stock offering.