The
Treasury
Department announced today that it will auction its warrants in Bank
of America Corp. this week, following the bank's exit from TARP in
December.
Once
the sales are complete, Treasury will be completely divested from the bank.
"The
proceeds of these sales will provide an additional return to the American
taxpayer from Treasury's investment in the company beyond the dividend payments
it received on the related preferred stock," the department said in a
statement.
The
warrants will be offered Wednesday through a modified Dutch account run by
Deutsche Bank Securities Inc.
Treasury
will offer nearly 150,4375,940 "A" warrants and 121,792,790 "B" warrants.
Treasury holds two sets of warrants in Bank of America because the bank
received TARP money through two different programs -- $25 billion through the
Capital Purchase Program and $20 billion through the Targeted Investment
Program.
The
"A" warrants came from the TIP aid, and have an exercise price of $13.30. The "B"
warrants, from the CPP program, have an exercise price of $30.79.
Bank
of America's stock closed Monday at $16.71 a share.
The
minimum bid for the "A" warrants is $7 per warrant, and the minimum bid for the
"B" warrants is $1.50 per warrant.
Last
month, Treasury announced forthcoming warrant sales for Washington
Federal Inc., Texas Capital Bancshares Inc. and Signature
Bank.
Last
year, the government earned $1.1 billion by auctioning off warrants in JPMorgan Chase & Co., Capital One Financial Corp. and TCF
Financial Corp. It made an additional $2.9 billion from 31 other
banks that repurchased their warrants without auctions.
1 Comments
We can still feel the after shock of the greatest recession in the history. Imagine the Treasury Department will auction its warrants in Bank of America Corp. this week, following the bank's exit from TARP in December. At least the proceeds of the sales will provide an additional return to the American taxpayer from Treasury's investment in the company beyond the dividend payments it received on the related preferred stock. Another thing, the homeowners are among the people hit hardest by this recession, partly because of unemployment and decreased revenues, but also the extra strain over the decrease in security that home value typically provides. Part of the joys of homeownership are property taxes, and though home values have drastically dropped, those tax bills have not, and it has seen homeowners scrambling for any extra cash they can find, even payday loans. Tax revenues have decreased in all 50 states, which have left many holding the bag on budget shortfalls of epic proportions.