US BANCORP \DE\ — Capital/Financing Update 2006

Mar 16, 2006

FWP 1 c02886fwfwp.htm FREE WRITING PROSPECTUS fwp PAGEBREAK

March 14, 2006

Filed under Rule 433 File Nos. 333-132297 and 333-132297-01

FINAL TERM SHEET

1,250,000 ITS USB Capital IX

6.189% Fixed-to-Floating Rate Normal Income Trust Securities (liquidation amount $1,000 per security) fully and unconditionally guaranteed, as described in the prospectus supplement, by U.S. Bancorp

Issuer of ITS :	USB Capital IX
Issuer of Preferred Stock
Under Stock Purchase
Contract Agreement and
Junior Subordinated Notes
and Guarantor of ITS :	U.S. Bancorp
Size :	1,250,000 Normal ITS, liquidation amount $1,000 per
security and $1,250,000,000 in the aggregate. The
1,250,000 Normal ITS, together with the $1,000,000 of
Trust Common Securities to be purchased by U.S.
Bancorp, correspond to:

| • | 12,510 Stock Purchase Contracts, stated amount
$100,000 per Stock Purchase Contract and
$1,251,000,000 in the aggregate (obligating the Trust
to purchase on the Stock Purchase Date 12,510 shares
of Preferred Stock with an aggregate liquidation
preference of $1,251,000,000), and |
| --- | --- |
| • | $1,251,000,000 initial principal amount of
Junior Subordinated Notes. |

Distributions on ITS : Normal ITS: Payable on each Regular Distribution Date:

• from March 17, 2006 through the later of April 15, 2011 and the Stock Purchase Date, accruing at a rate equal to 6.189% per annum for each Distribution Period ending prior to such date, and thereafter accruing at an annual rate equal to the greater of (i) Three-Month LIBOR for such Distribution Period plus 1.02% and (ii) 3.50%; and

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• on a cumulative basis for each Regular Distribution Date to and including the Stock Purchase Date and on a non-cumulative basis thereafter.

Stripped ITS : Payable on each Regular Distribution Date on or prior to the Stock Purchase Date:

• at the rate of 0.65% per annum , accruing for each Stripped ITS from the Regular Distribution Date immediately preceding its issuance; and

• on a cumulative basis.

Capital ITS : Payable on each Capital ITS Distribution Date prior to the Stock Purchase Date at the rate of 5.539% per annum , accruing for each Capital ITS from the Capital ITS Distribution Date immediately preceding its issuance.

| Interest Rate on Junior
Subordinated Notes to the
Remarketing Settlement
Date : | 5.539% per annum , accruing from March 17, 2006. |
| --- | --- |
| Reset Caps on Remarketing
of Junior Subordinated
Notes : | The Fixed Rate Reset Cap will be the prevailing market
yield, as determined by the Remarketing Agent, of the
benchmark U.S. treasury security having a remaining
maturity that most closely corresponds to the period
from such date until the earliest date on which the
Junior Subordinated Notes may be redeemed at U.S.
Bancorp’s option in the event of a successful
Remarketing, plus 350 basis points, or 3.50% per
annum, and the Floating Rate Reset Cap, which the
Reset Spread may not exceed, will be 302 basis points,
or 3.02% per annum . |
| Contract Payment Rate : | 0.65% per annum , accruing from March 17, 2006. |
| Dividend Rate on the Preferred Stock : | To but not including the Dividend Payment Date in
April 2011, a rate per annum equal to 6.189% per
annum . |
| | Thereafter for each related Dividend Period, a rate per annum equal to the greater of (x) Three-Month
LIBOR for the related Dividend Period plus 1.02% and
(y) 3.50%. |
| Interest Rate on U.S.
Bank National Association
Deposit Pledged to Secure
Stock Purchase Contracts
Between Remarketing
Settlement Date and Stock
Purchase Date : | 5.32% per annum . |

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| Offering Price, Proceeds
Before Expenses and
Commissions to the
Underwriters : | Initial Public Offering Price : $1,000 per Normal ITS,
$1,250,000,000 in the aggregate. |
| --- | --- |
| | Proceeds Before Expenses to U.S. Bancorp : $1,000 per
Normal ITS, $1,250,000,000 in the aggregate. |
| | Commissions to the Underwriters : $10.00 per Normal
ITS, $12,500,000 in the aggregate. |
| Selected Dealer Allowance : | Not applicable. |
| Trade Date : | March 14, 2006. |
| Settlement Date : | March 17, 2006. |
| U.S. Bancorp’s Estimated
Total Out-of-Pocket
Expenses, Excluding
Underwriting Commissions : | $888,607. |
| Expected Net Proceeds to
U.S. Bancorp from the
Offering, after Expenses
and Underwriting
Commissions : | $1,236,611,393. |

This communication is intended for the sole use of the person to whom it is provided by us.

The issuer has filed a registration statement, including a prospectus, with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus supplement and the accompanying prospectus if you request it by calling toll-free 1-800-326-5897.

Terms are used in this term sheet with the meanings assigned to them in the prospectus supplement subject to completion, dated March 13, 2006.

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