U.S. Bancorp Taps Novel Trust Preferred

This article appears courtesy of Institutional Investor

Source: Corporate Financing Week

Dan Shirai

U.S. Bancorp offered $375 million in trust preferreds last week in what bankers say is the tip of the iceberg for hybrid refinancings. Around $20 billion in trust preferreds are expected to be refinanced next year and with this deal serving as a precedent, bank holding companies will be able to obtain Tier I capital, high-equity treatment from Moody’s Investors Service , and tax deductibility, all in the same security.