U.S. Bancorp's new issue comes in, remains actively traded; MFA notes gain post-NYSE listing

By Stephanie N. Rotondo

Portland, Ore., April 18 - U.S. Bancorp's new issue of series G noncumulative preferreds was attracting a fair bit of investor interest on Wednesday.

The $1.09 billion issue priced Tuesday and instantly began trading at a premium. Though the preferreds came in a bit from Tuesday's highs, a trader said it "still looks like pretty good volume on it."

Furthermore, another trader said that "everything is looking very well right now." Assuming that thing continue to go smoothly in Spain, he said, another deal - or deals - like U.S. Bancorp's could soon hit the pipeline.

Meanwhile, MFA Financial Inc.'s 8% $25-par notes due 2042 were starting to move up. They officially listed on the New York Stock Exchange on Tuesday.

U.S. Bancorp slips, still busy

U.S. Bancorp's newly priced $1.09 billion offering of fixed-to-floating-rate series G noncumulative perpetual preferred stock came in "a little bit" on Wednesday, according to a trader.

Around midday, he saw the issue trading at $25.45, adding that the paper had freed to trade.

Another trader quoted the preferreds at $25.40 bid, $25.45 offered after the close.

The deal priced Tuesday and hit highs around $25.50.

Dividends will be fixed at 6% until April 15, 2017, at which time the rate will be calculated yearly at Libor plus 486.125 basis points.

The preferreds have a liquidation preference of $25,000 each. They were sold in the form of $25 depositary shares that each represent 1/1,000th of an interest in a preferred.

The company will apply to list the preferreds on the NYSE under the ticker symbol "USBPN." Settlement is expected April 20.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. and U.S. Bancorp Investments Inc. are the joint bookrunners. Mesirow Financial Inc., Oppenheimer & Co. Inc., Raymond James & Associates Inc., RBC Capital Markets LLC and Stifel, Nicolaus & Co. Inc. are co-managers.

Proceeds will be used for general corporate purposes, which may include the redemption of some callable trust preferred securities including, but not limited to, the USB Capital XI 6.6% trust preferreds and the USB Capital XII 6.3% trust preferreds.

U.S. Bancorp is based in Minneapolis.

MFA rises post-listing

A trader said MFA Financial's $100 million of 8% $25-par senior notes due April 15, 2042 - which priced April 3 - were "trading higher on the board."

The issue listed on the NYSE under the ticker symbol "MFO" on Tuesday. The notes closed Wednesday's session up 9 cents at $24.84.

Proceeds will be used to acquire mortgage-backed securities consistent with the firm's investment policy and for working capital, which may include the repayment of repurchase agreements.

MFA is a New York-based real estate investment trust engaged in the business of investing, on a leveraged basis, in residential agency and non-agency mortgage-backed securities.

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