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On July 20, 2026, U.S. Bancorp priced $1 billion in Medium-Term Notes, Series EE (Senior), featuring an initial fixed interest rate of 5.470% per annum. These notes mature on July 27, 2037, and will switch to a floating rate based on Compounded SOFR plus 124.8 basis points after the reset date in July 2036. The issuance was underwritten by U.S. Bancorp Investments, Inc., Goldman Sachs & Co. LLC, and Morgan Stanley & Co. LLC, with settlement anticipated around July 27, 2026.
Key Points
- NYSE: USB-PS
- U.S. Bancorp priced $1 billion in fixed-to-floating senior notes with a 5.470% fixed rate and a floating rate spread of +124.8 basis points
- Issue date: July 27, 2026; Maturity date: July 27, 2037; Reset date: July 27, 2036
- Notes issued at par (100.000% of principal) with net proceeds of $997 million after $3 million agents' commissions
Details on Senior Notes Structure and Terms
U.S. Bancorp disclosed comprehensive details regarding its $1 billion issuance of Medium-Term Notes, Series EE (Senior). The notes were offered at par value, with investors paying 100.000% of the $1 billion principal. Issued in book-entry form via The Depository Trust Company and its participants, delivery is expected on or about July 27, 2026. Classified as unsecured senior debt, these notes differ from subordinated or secured debt instruments. After deducting $3 million in agents' commissions (0.300% discount), net proceeds to U.S. Bancorp totaled $997 million.
The notes feature a hybrid fixed-to-floating interest rate structure. During the initial fixed-rate period from issuance through July 27, 2036, holders receive semi-annual interest payments at 5.470% annually on January 27 and July 27, starting January 27, 2027. After nearly 10 years, the notes convert to a floating rate until maturity in July 2037, enabling U.S. Bancorp to manage interest rate exposure while offering investors initial rate stability followed by floating-rate exposure.
Interest Rate Details and Floating Rate Benchmark
Post the July 2036 reset date, interest payments become quarterly on January 27, April 27, July 27, and October 27. The floating rate is based on Compounded SOFR with an observation period shift, plus a spread of 124.8 basis points, reflecting the market’s transition from LIBOR to SOFR for U.S. dollar floating-rate instruments.
The floating rate calculation involves interest determination dates two U.S. Government Securities Business Days before each payment date. The observation period spans from two business days before the interest period’s start to two business days before the payment date. The Actual/360 day-count convention applies during the floating-rate period, differing from the 30/360 convention used in the fixed-rate period. U.S. Bank Trust Company, National Association is the designated calculation agent.
Redemption Options and Terms
U.S. Bancorp may redeem the notes starting 180 days after issuance. Between January 23, 2027, and the reset date (July 27, 2036), the company can redeem all or part of the notes at a price equal to the greater of (1) the present value of remaining payments discounted at the treasury rate plus 15 basis points minus accrued interest, or (2) par plus accrued interest. This make-whole provision protects investors during the fixed-rate period.
On the reset date, the notes may be redeemed in full at par plus accrued interest but not partially. From April 27, 2037, until maturity, redemption at par plus accrued interest is allowed at any time, in whole or in part. Redemption notices must be given 5 to 60 days prior to the redemption date. Early redemption requires regulatory approvals as mandated by law.
Distribution and Underwriting Syndicate
The notes were distributed through a syndicate of five financial firms. U.S. Bancorp Investments, Inc. acted as lead underwriter, purchasing $490 million. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, joint book-running managers, each acquired $245 million. Co-managers Academy Securities, Inc. and Telsey Advisory Group LLC purchased $10 million each. The Depository Trust Company handled book-entry settlement under reference number 0280.
Settlement was scheduled five business days post-pricing (T+5), consistent with debt market standards. Secondary market trades are generally required to settle in one business day under SEC Rule 15c6-1. These details were outlined in the pricing supplement to ensure transparency regarding distribution and settlement.
Risk Factors and Investor Safeguards
The notes are not bank deposits or savings accounts and are not insured by the FDIC or any government agency. Being unsecured, investors lack priority claims on U.S. Bancorp assets in default scenarios. Comprehensive risk factors are detailed starting on page S-9 of the prospectus supplement, with additional information available in U.S. Bancorp’s SEC filings.
The filing includes regulatory disclaimers confirming that neither the SEC nor state securities commissions have approved or disapproved the notes or verified the completeness of offering documents. Misrepresentations are criminal offenses. Investors can access the March 9, 2026 prospectus and prospectus supplement on the SEC website for full disclosure.
Trading Identifiers and Interest Payment Schedule
The notes carry CUSIP number 91159HKB5 for secondary market trading. During the fixed-rate period (July 27, 2026 to July 27, 2036), interest is paid semi-annually on January 27 and July 27, with record dates 15 days prior. After the reset date, quarterly interest payments occur on January 27, April 27, July 27, and October 27, starting October 27, 2036. Payment conventions differ between fixed (following unadjusted business day) and floating (modified following business day) periods, with New York as the business day reference.
Pricing Details and Underwriters’ Compensation
The offering was priced at par (100.000%), with agents’ commissions totaling 0.300% ($3 million). This standard investment-grade compensation covers underwriting and distribution services. Net proceeds before expenses were $997 million. The trade date was July 20, 2026, with the issue date on July 27, 2026, allowing time for legal and regulatory preparations. The pricing supplement dated July 20, 2026 supplements the March 9, 2026 base prospectus and prospectus supplement.
Regulatory Compliance and Sales Restrictions
The offering was conducted under SEC Rule 424(b)(2) and Registration Statement No. 333-294133. Sales to retail investors in the EEA and UK are prohibited, reflecting regional regulatory limits, though institutional investors remain eligible. The filing incorporates U.S. Bancorp’s SEC annual and quarterly reports by reference. Early redemption is subject to regulatory approvals, indicating capital management constraints.
Market Context and Investor Insights
The fixed 5.470% coupon reflects July 2026 market conditions. The fixed-to-floating structure offers U.S. Bancorp interest rate flexibility, combining initial yield certainty with floating-rate exposure based on SOFR plus 124.8 basis points in the final year. The immediate effect on U.S. Bancorp’s share price was not disclosed.
This $1 billion issuance adds unsecured senior debt to U.S. Bancorp’s capital structure, ranking below secured debt but above subordinated debt and equity. The notes provide long-term fixed-rate funding to support liquidity, strategic initiatives, or debt refinancing. Investors should assess their risk tolerance, investment goals, and macroeconomic factors when considering these notes.
