U.S. Bancorp bolstered its status as one of the nation's major ABS and MBS trustees last week when it announced the acquisition of Wachovia Corp.'s corporate trust and institutional custody businesses. With this purchase, U.S. Bancorp will become the second largest ABS and MBS trustee, in terms of par amount of securities and number of issues, behind Deutsche Bank Trust Co. Americas. The deal, executed through its U.S. Bank subsidiary, will give the Minneapolis-based trustee administration of $180 billion worth of ABS and MBS spread over 317 issues.
U.S. Bancorp said it will buy the Wachovia unit for an initial payment of $720 million with an additional back-end payment of up to $80 million depending on business retention throughout the course of the deal. Assuming U.S. Bancorp is able to retain the entire book of business bought from Wachovia, it will hand over the full $80 million. The deal is expected to close in December, and the conversion of client accounts should be completed by September 2006.