US Bank launches curated product suite for SPACs

US Bank is rolling out a group of specialized products for special-purpose acquisition company sponsors covering trustee administration, investment, and disbursement services.

Why should we care?
It would appear US Bank is seeking to grow revenue from the creation of SPACs as vehicles to take companies public amid a wave of SPAC mergers over the past year. SPACs raise capital in an IPO for the purpose of acquiring an existing company or companies. They allow investors to take a company public faster and offer greater certainty than the traditional IPO process. In 2020, they generated gross proceeds of $79B, a 480% jump from the prior year. Indeed, banks earned billions of dollars in fees garnered from the establishment of SPACs last year. US Bank is offering SPAC sponsors a menu of regulatory and accounting services to serve trustee needs. “Our dedicated team has the knowledge and expertise to support the unique requirements of SPAC sponsors,” Christine Waldron, chief global strategy officer at U.S. Bank Global Fund Services said. The enthusiasm for SPACs, however, may be cooling as the Securities and Exchange Commission (SEC) reportedly considers new guidance to “rein in growth projections'' made by listed SPACs and clarify when they qualify for legal protections. Earlier this month, the SEC guidance suggested that SPAC warrants may be considered liabilities instead of equity instruments. The regulator’s moves could underlie a recent dampening of the SPAC mania that took shape in 2020. After 100 new SPAC deals in March, only 10 have so far come to fruition in April, according to recent research.