U.S. Bancorp Announces Debt/Equity Conversion With Mitsubishi UFJ Financial Group, Inc. (MUFG)
August 02 2023 - 7:00PM
Business Wire
U.S. Bancorp (NYSE:USB) announced plans to issue 24 million
shares of U.S. Bancorp common stock to an affiliate of Mitsubishi
UFJ Financial Group, Inc. (MUFG) for an aggregate purchase price of
$936 million. The proceeds will be used by U.S. Bancorp to satisfy
a portion of its previously announced repayment obligation to MUFG
(as described below). The debt/equity conversion is expected to
close on August 3, 2023, and will be accretive to U.S. Bancorp’s
capital levels, increasing its CET1 ratio by approximately 20 basis
points.
As previously announced, on December 1, 2022, U.S. Bancorp
completed the acquisition of MUFG Union Bank N.A.’s core regional
banking franchise. U.S. Bancorp received $3.5 billion in additional
cash held by MUFG Union Bank, N.A., which, under the terms of the
purchase agreement, U.S. Bancorp is required to repay on or prior
to the fifth anniversary date of the acquisition, with a reasonable
best-efforts obligation to repay up to $1 billion within a
reasonable time after conversion. The proceeds of the stock
issuance will satisfy the payment requirement made in connection
with the conversion, with the remaining obligation due in cash by
the previously agreed upon deadline of December 1, 2027.
The issuance of the 24 million shares and debt repayment is
additive to the company’s capital building initiatives discussed in
its second quarter earnings press release of July 19, 2023. The
transaction will also strengthen U.S. Bancorp’s strategic
relationship with MUFG.
About U.S. Bank
U.S. Bancorp, with approximately 77,000 employees and $681
billion in assets as of June 30, 2023, is the parent company of
U.S. Bank National Association. The Minneapolis-based company
serves millions of customers locally, nationally and globally
through a diversified mix of businesses: Consumer and Business
Banking; Payment Services; Corporate & Commercial Banking; and
Wealth Management and Investment Services. Union bank, consisting
primarily of retail banking branches on the West Coast, joined U.S.
Bancorp in 2022. The company has been recognized for its approach
to digital innovation, social responsibility, and customer service,
including being named one of the 2023 World’s Most Ethical
Companies and Fortune’s most admired superregional bank. To learn
more, please visit usbank.com and click on “About Us.”
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version on businesswire.com: https://www.businesswire.com/news/home/20230802239579/en/
Investor contact: George Andersen, U.S. Bancorp Investor
Relations george.andersen@usbank.com, 612.303.3620
Media contact: Jeff Shelman, U.S. Bancorp Public Affairs and
Communications Jeffrey.shelman@usbank.com, 612.303.9933
US Bancorp (NYSE:USB)
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