U.S. Bank, N.A., has entered into a definitive agreement to purchase the corporate trust and institutional custody businesses of Wachovia Corporation.
As a result of this transaction, U.S. Bank Corporate Trust Services will acquire approximately 14,100 new client issuances and $410 billion in assets under administration and U.S. Bank Institutional Trust & Custody will acquire approximately 1,700 new clients and $570 billion in assets under administration. Under the terms of the agreement, the transaction has a $720 million initial cash purchase price with up to an additional $80 million payable within one year based on business retention levels. The transaction enhances the corporate trust offices in six current locations and adds 19 new corporate trust offices and institutional custody offices primarily in the mid-Atlantic and southeastern states.
Jerry Grundhofer, chairman and chief executive officer of U.S. Bancorp, noted, “This transaction solidifies U.S. Bank as a top corporate bond trustee and makes us more competitive by increasing our existing scale and leveraging our industry leading technology and operational platforms. It is consistent with U.S. Bancorp’s acquisition strategy of purchasing fee-based niche businesses. Further, this transaction illustrates our dedication to expanding the distribution and product offerings in the payments and fiduciary businesses.”
U.S. Bank currently has 31 corporate trust offices across the country and offers a complete line of trust services. U.S. Bank serves as trustee and paying agent for the issuance of taxable and non-taxable securities, including the review of documents and indentures, registration, and authentication of bonds, receipts and disbursement of bond sale proceeds, successor trusteeships, escrow account services and transfer and paying agency services. Also, U.S. Bank provides mortgage-backed and asset-backed securitizations, money market paying agency services, bond and tax administration and document custody services. Additionally, U.S. Bank has 36 institutional trust & custody offices in 24 states focusing on trust and custody services, retirement, investment and health savings accounts for institutional clients. Its product offerings include retirement plans (401(k), profit sharing or money purchase pension plans and defined benefit), institutional trust and custody, master trust services and health savings accounts.