New Issue: U.S. Bancorp sells $2.5 billion convertible at Libor minus 168 bps, up 20%; reoffered at 98.75

By Rebecca Melvin

Princeton, N.J., Aug. 10 - U.S. Bancorp priced $2.5 billion of 30-year convertible floaters at par to yield the three-month Libor minus 168 basis points with a 20% initial conversion premium. Bookrunner Lehman Brothers chose to reoffer the convertible debentures at 98.75.

The Rule 144A deal has a $375 million over-allotment option.

The debentures have no takeover protection but are callable and putable on Aug. 21, 2006. They are also putable on Aug. 21, 2007, 2010, 2015, 2020, 2025 and 2030.

Minneapolis-based U.S. Bancorp, the sixth largest U.S. financial holding company, will use a portion of net proceeds to fund repurchases of 2.58 million shares of its common stock simultaneously with the offering. It expects to use the remainder for general corporate purposes, including possible additional share repurchases.

Issuer:	U.S. Bancorp
Issue:	Convertible senior debentures
Bookrunner:	Lehman Brothers
Amount:	$2.5 billion
Greenshoe:	$375 million
Maturity:	Nov. 21, 2035
Coupon:	3-month Libor minus 168 bps
Price:	Par
Reoffered price:	98.75
Yield:	3-month Libor minus 168 bps
Conversion premium:	20%
Conversion price:	$36.06
Conversion ratio:	27.7316
Takeover protection:	No
Dividend protection:	Yes
Call:	Callable at year 1
Puts:	At year 1, 2, 5, 10, 15, 20 and 25
Pricing date:	Aug. 9, after the close
Settlement date:	Aug. 15
Distribution:	Rule 144A

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