Summary
U.S. Bancorp (USB) filed an 8-K on February 2, 2021, reporting on the closing of a significant financing transaction. The company successfully sold 30,000,000 depositary shares, each representing a 1/1,000th interest in its Series M Non-Cumulative Perpetual Preferred Stock. This issuance was made under a previously effective registration statement. The filing also details amendments to the company's Certificate of Incorporation to establish the specific terms and rights of this newly issued Series M Preferred Stock. The transaction involved a syndicate of prominent underwriters, indicating a robust capital market reception. This move strengthens the company's capital base and provides financial flexibility.
Key Highlights
- 1U.S. Bancorp closed the sale of 30,000,000 depositary shares representing Series M Non-Cumulative Perpetual Preferred Stock.
- 2Each depositary share represents a 1/1,000th interest in a share of the preferred stock.
- 3The issuance occurred on February 2, 2021, and was registered under a Form S-3 registration statement.
- 4The company amended its Certificate of Incorporation to establish the rights and preferences of the Series M Preferred Stock.
- 5A significant group of underwriters, including major financial institutions, were involved in the offering.
- 6The preferred stock is non-cumulative and perpetual, with a liquidation preference of $25,000 per share.
- 7This transaction serves to bolster the company's capital structure.
Frequently Asked Questions
The primary purpose of this 8-K filing was to report on the closing of the sale of 30,000,000 depositary shares representing U.S. Bancorp's Series M Non-Cumulative Perpetual Preferred Stock and to detail the amendments made to its corporate charter to establish the terms of this preferred stock.
The Series M Preferred Stock is non-cumulative, perpetual, has a par value of $1.00 per share, and a liquidation preference of $25,000 per share. The depositary shares represent fractional ownership of this preferred stock.
The offering involved a syndicate of underwriters, including Morgan Stanley & Co. LLC, U.S. Bancorp Investments, Inc., BofA Securities, Inc., RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and TD Securities (USA) LLC, acting as representatives.
The sale of preferred stock strengthens U.S. Bancorp's capital base. Preferred stock is a form of equity that can improve regulatory capital ratios and provide financial flexibility without diluting common shareholders' voting control as significantly as common stock issuance.