U.S. Bancorp (USB:US), the country’s fifth- largest lender by deposits, sold $1.3 billion of debt after the bank posted its 11th straight year-over-year rise in quarterly profit.
The operator of more than 3,000 branches in 25 states issued 2.95 percent, 10-year subordinated notes to yield 150 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The Minneapolis-based company will use proceeds from the sale for general corporate purposes, according to a person familiar with the transaction.
The bank previously issued 10-year senior unsecured bonds in February, selling $1 billion of 3 percent debt at a spread of 110 basis points to benchmarks, Bloomberg data show. The debt increased 0.3 cent to 104.6 cents on the dollar to yield 2.47 percent at 3:24 p.m. in New York, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority.
The new bonds may be rated A1 by Moody’s Investors Service, the fifth-highest level of investment grade, said the person, who asked not to be identified because the terms are private. Credit Suisse Group AG, Morgan Stanley, and U.S. Bancorp managed the sale.
The bank reported today that second-quarter profit climbed 18 percent to $1.42 billion, or 71 cents a share, from $1.2 billion, or 60 cents, a year earlier.
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