What is the purpose of the Series N Preferred Stock?

The Series N Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock was established to raise capital for U.S. Bancorp. It represents a new class of equity with specific dividend and liquidation preferences.

What are depositary shares and how do they relate to the preferred stock?

Depositary shares are a convenient way for investors to hold preferred stock. In this case, each depositary share represents a fractional interest (1/25th) in a full share of the Series N Preferred Stock. They are easier to trade and manage than whole shares of preferred stock.

What does 'Fixed Rate Reset Non-Cumulative Perpetual' mean for the preferred stock?

'Fixed Rate Reset' indicates that the stock pays a fixed dividend for an initial period, after which the dividend rate may be reset periodically. 'Non-Cumulative' means that any missed dividend payments are not carried forward and will not be paid to shareholders later. 'Perpetual' implies that the stock does not have a maturity date and remains outstanding indefinitely unless redeemed by the company.

What is the significance of the liquidation preference of $25,000 per share?

The liquidation preference indicates the amount that holders of the preferred stock are entitled to receive per share, in preference to common stockholders, in the event of liquidation or dissolution of the company. In this case, it is $25,000 per full share of preferred stock.

USB 8-K: Shareholder Matters & Corporate Changes

Summary

U.S. Bancorp (USB) filed an 8-K on October 25, 2021, detailing amendments to its Certificate of Incorporation to establish Series N Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock. The company also announced the successful closing of the sale of 1,500,000 depositary shares representing ownership of this new preferred stock on October 26, 2021. Each depositary share represents 1/25th of a share of the preferred stock, which has a liquidation preference of $25,000 per share. This filing is primarily focused on the legal and transactional aspects of issuing new preferred stock. Investors should note that this is a capital raise activity and involves the creation of a new class of stock with specific terms regarding dividend payments and liquidation preferences. The transaction was executed under a pre-existing registration statement and involved an underwriting agreement with U.S. Bancorp Investments, Inc. and Goldman Sachs & Co. LLC.

Key Highlights

1Establishment of Series N Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock through an amendment to the Certificate of Incorporation.
2Closed the sale of 1,500,000 depositary shares representing beneficial ownership of the new preferred stock.
3Each depositary share represents 1/25th of a share of preferred stock.
4The Preferred Stock has a liquidation preference of $25,000 per share.
5The offering was conducted under a Form S-3 registration statement.
6Involved an underwriting agreement with U.S. Bancorp Investments, Inc. and Goldman Sachs & Co. LLC.
7The filing includes the Certificate of Designations, Underwriting Agreement, and Deposit Agreement.

US BANCORP \DE\ 8-K Report, Rights Modification (Oct 26, 2021)

Summary

Key Highlights

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