QUANTUMONLINE.COM SECURITY DESCRIPTION: U.S. Bancorp, Depositary Shares each representing a 1/100th interest in a share of Series A Non-Cumulative Perpetual Preferred Stock, liquidation preference $1000 per depositary share, redeemable at the issuer's option on the later of April 15, 2011 and the Stock Purchase Date at $1000 per depositary share plus declared and unpaid dividends, and with no stated maturity.
Non-cumulative dividends will be payable on (1) from the settlement date of the Exchange Offer to the later of April 15, 2011 and the Stock Purchase Date, at a rate of 7.189% per annum semi-annually in arrears on each April 15 and October 15 through the later of April 15, 2011 and (i) the Stock Purchase Date (if the Stock Purchase Date is also a Dividend Payment Date) or (ii) the Dividend Payment Date immediately preceding the Stock Purchase Date (if the Stock Purchase Date is not a Dividend Payment Date), and (2) from and including the later of April 15, 2011 and the Stock Purchase Date, quarterly in arrears on each January 15, April 15, July 15 or October 15 to holders of record on the record date which is the last day of the month prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date). The Stock Purchase Date is expected to be April 15, 2011 but could be deferred for quarterly periods until as late as April 15, 2012. After the stock purchase date, the depositary shares will pay at a rate of the greater of 3.50% or the Three Month LIBOR plus 1.02%.
The dividends are non-cumulative and if the board of directors does not declare a dividend or the company fails to pay a dividend declared by the board for any quarterly dividend period, the holder will not be entitled to receive any dividend for that quarterly period and the undeclared or unpaid dividend will not accumulate.
Dividends paid by this preferred security are eligible for the preferential income tax rate of 15% to a maximum of 20% depending on the holder's tax bracket (and under IRS specified holding restrictions) and are also eligible for the dividends received deduction for corporate holders (see page 76 of the prospectus for further information).
In regard to the payment of dividends and upon liquidation, the preferred shares rank equally with other preferreds and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock, dividends and dividend payment dates by clicking on the ‘Link to IPO Prospectus’ provided below.