U.S. Bancorp Prices $1 Billion Fixed-to-Floating Senior Notes at 5.470% Fixed Rate

Structure and Terms of the Senior Notes Offering

U.S. Bancorp's disclosure provides detailed specifications for the $1 billion issuance of Medium-Term Notes, Series EE (Senior). The notes were offered at par value, meaning investors paid 100.000% of the $1,000,000,000 principal amount. The offering document confirms that the notes will be issued in book-entry form through The Depository Trust Company and its direct participants, with expected delivery on or about July 27, 2026. The company designated these notes as unsecured senior debt, which contrasts with subordinated or secured instruments. Net proceeds to U.S. Bancorp before other expenses totaled $997 million after the agents' commission of $3 million, representing a 0.300% discount.

The notes feature a unique hybrid structure that transitions from fixed-rate to floating-rate interest payments at a predetermined reset date. During the fixed-rate period from the issue date through July 27, 2036, noteholders will receive semi-annual interest payments of 5.470% per annum on January 27 and July 27 each year, beginning January 27, 2027. The filing establishes that the fixed rate applies over an approximately 10-year period, after which the notes enter a floating-rate period lasting until maturity in July 2037. This structure allows U.S. Bancorp to manage interest rate risk while offering investors initial rate certainty followed by floating-rate exposure during the final year.

Interest Rate Mechanics and Floating Rate Benchmark

Following the July 2036 reset date, the notes transition to a floating-rate structure with quarterly interest payment dates on January 27, April 27, July 27, and October 27. The disclosure specifies that the floating rate will be determined using Compounded SOFR (Secured Overnight Financing Rate) with an observation period shift, calculated for each quarterly interest period in accordance with the prospectus supplement. The spread over the floating rate benchmark is set at +124.8 basis points, which represents the additional yield above the SOFR calculation. This specification reflects the current market transition away from LIBOR to SOFR as the primary benchmark rate for U.S. dollar-denominated floating-rate instruments.

The filing details the operational mechanics for determining the floating interest rate, including the identification of interest determination dates and observation periods. Interest determination dates occur two U.S. Government Securities Business Days before each applicable interest payment date during the floating-rate period. The observation period for each quarterly interest period runs from two business days before the first date of that interest period through two business days before the corresponding interest payment date. For floating-rate interest periods, the company employs an Actual/360 day-count convention, contrasting with the 30/360 convention used during the fixed-rate period. U.S. Bank Trust Company, National Association was designated as the calculation agent responsible for computing the floating interest rate.

Redemption Rights and Optionality Features

The disclosure outlines multiple redemption scenarios available to U.S. Bancorp, beginning 180 days after the issue date. Starting January 23, 2027, and continuing through July 27, 2036 (the reset date), U.S. Bancorp may redeem the notes in whole or in part at any time at a redemption price equal to the greater of two calculations. The first method involves calculating the present value of remaining scheduled principal and interest payments, discounted to the redemption date at the applicable treasury rate plus 15 basis points, then subtracting accrued interest. The second method is par plus accrued interest. This structure provides the company with flexibility while protecting investors through the make-whole calculation during the fixed-rate period.

Additional redemption provisions apply to specific dates and circumstances. On the reset date itself (July 27, 2036), U.S. Bancorp may redeem the notes in whole but not in part at 100% of principal amount plus accrued interest. From April 27, 2037 onward through maturity, the company may redeem the notes at any time or in part at the same par-plus-accrued-interest redemption price. The filing notes that redemption notices must be provided at least 5 but not more than 60 days before the redemption date to each affected noteholder. The company also disclosed that the notes may not be redeemed prior to stated maturity without requisite prior approvals from applicable regulators, as required by applicable law or regulation.

Distribution Channels and Underwriting Syndicate

The company engaged a syndicate of five financial institutions to distribute the notes. U.S. Bancorp Investments, Inc. served as lead underwriter, purchasing $490 million of the $1 billion principal amount. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, designated as joint book-running managers alongside U.S. Bancorp Investments, each purchased $245 million. Two additional co-managers, Academy Securities, Inc. and Telsey Advisory Group LLC, each purchased $10 million of the notes. The filing provides delivery instructions identifying The Depository Trust Company under reference number 0280 for book-entry settlement.

Settlement of the notes was scheduled for the fifth business day following the pricing date, consistent with standard T+5 settlement practices in the debt capital markets. Under Rule 15c6-1 of the Securities Exchange Act, secondary market trades in these notes are generally required to settle in one business day. This distribution structure and settlement timeline were detailed in the pricing supplement to provide transparency to market participants regarding the offering's mechanics and the institutions responsible for marketing and distribution.

Risk Disclosures and Investor Protections

The filing explicitly states that the notes are not savings accounts, deposits, or other obligations of a bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Additionally, the notes are unsecured, meaning investors have no priority claim on specific assets of U.S. Bancorp in the event of default or insolvency. The disclosure directs investors to review comprehensive risk factor discussions beginning on page S-9 of the prospectus supplement and to consult USB's annual and quarterly reports filed with the Securities and Exchange Commission for additional risk information incorporated by reference.

The company included standard regulatory disclaimers confirming that neither the SEC nor any state securities commission has approved or disapproved the notes or determined whether the pricing supplement, prospectus supplement, or prospectus is truthful and complete. The filing emphasizes that any representation to the contrary constitutes a criminal offense. Investors were directed to access the prospectus dated March 9, 2026, and the prospectus supplement dated March 9, 2026, via the SEC website for comprehensive offering documentation and disclosure.

Trading and Interest Payment Schedule

The notes were assigned CUSIP number 91159HKB5 for identification and trading purposes in the secondary market. Interest payment dates during the 10-year fixed-rate period occur semi-annually on January 27 and July 27 each calendar year, with the first payment scheduled for January 27, 2027. Record dates for determining interest payment eligibility are set 15 calendar days prior to each interest payment date. The fixed-rate period spans from the July 27, 2026 issue date through July 27, 2036, providing nearly a decade of predictable semi-annual cash flows before the transition to floating-rate payments.

Following the reset date in July 2036, the interest payment frequency increases to quarterly, occurring on January 27, April 27, July 27, and October 27, with the first floating-rate payment scheduled for October 27, 2036. This quarterly payment schedule during the floating-rate period aligns with standard market practice for SOFR-based instruments. The modified following business day convention applies during the floating-rate period, meaning if a payment date falls on a non-business day, payment is made on the next business day with appropriate interest adjustments. During the fixed-rate period, the following unadjusted business day convention applies, treating New York as the relevant business day reference.

Pricing and Agents' Compensation Structure

The offering was priced with a total price to public of 100.000%, reflecting par value pricing. Agents' commissions or discount amounted to 0.300% of the principal amount, totaling $3 million across all underwriting participants. This compensation structure is standard in investment-grade corporate debt offerings and reflects the underwriters' distribution and advisory services related to the transaction. The net proceeds to U.S. Bancorp before expenses were $997 million, representing the full principal amount less the agents' commission. The pricing supplement included a table summarizing these economics on a per-note and total basis for investor clarity.

The trade date for the offering was July 20, 2026, while the issue date for the notes was July 27, 2026. This one-week interval between trade and settlement dates is typical for corporate debt offerings and allows sufficient time for preparation of legal documentation, regulatory filings, and establishment of the depository and payment arrangements. The pricing supplement, as the third supplemental offering document, was dated July 20, 2026, to reflect the pricing determination, supplementing the base prospectus dated March 9, 2026, and the prospectus supplement also dated March 9, 2026.

Regulatory Framework and Restrictions

The offering was conducted under Securities and Exchange Commission Rule 424(b)(2), which governs the filing and use of pricing supplements for registered offerings. Registration Statement No. 333-294133 provided the underlying registration authority for the Medium-Term Notes, Series EE offering. The company noted that the notes are subject to a prohibition on sales to EEA (European Economic Area) and UK retail investors, reflecting regulatory restrictions in those jurisdictions regarding the marketing and sale of certain debt instruments to retail purchasers. This restriction does not apply to institutional or professional investors in those regions.

The filing incorporates by reference U.S. Bancorp's annual and quarterly reports filed with the SEC, allowing investors to access comprehensive financial and operational information about the company without requiring full reproduction in the offering documents. This incorporation by reference approach is standard practice for seasoned issuers and reduces document length while maintaining transparency. The company disclosed that the notes may not be redeemed prior to stated maturity without requisite prior approvals from applicable regulators, indicating that regulatory capital considerations may constrain the company's redemption optionality.

Market Context and Investor Considerations

The pricing of these senior notes at a 5.470% fixed rate reflects the interest rate environment and market conditions prevailing in July 2026. The fixed-to-floating structure provides U.S. Bancorp with interest rate optionality, as the company can benefit from potential rate declines during the fixed-rate period and manage the floating-rate obligation once rates are determined by SOFR plus 124.8 basis points. For investors, the initial fixed rate offers yield certainty for the first decade, followed by exposure to SOFR-based returns during the final year. The immediate share price impact was not clear from available public information in the filing.

U.S. Bancorp's issuance of $1 billion in unsecured senior notes adds to the company's debt capital structure and represents a discrete financing transaction. As senior unsecured debt, the notes rank below any outstanding secured obligations but ahead of subordinated debt and equity in the company's capital stack. The offering provides the company with longer-dated funding at fixed rates, which may support liquidity management, fund strategic initiatives, or refinance existing obligations. Investors evaluating these notes should consider their investment objectives, risk tolerance, and the broader economic and interest rate environment when determining suitability.