"Treasury reaps 8.5% return from companies exiting TARP"

[Clio the Leo]

Treasury reaps 8.5% return from companies exiting TARP
By Andrew Schukman and Russ Yates

Banks' repayments of TARP preferred stock and warrants continue to turn a profit for the U.S. Treasury Department, according to analysis by SNL Financial.

As of March 30, the government has made an 8.5% annualized return on the 49 companies that have exited the Capital Purchase Program and the Target Investment Program, which was created to provide additional funding to Citigroup Inc. and Bank of America Corp. SNL defines "exiting" the programs as completely redeeming the preferred stock and repurchasing the warrants. Institutions that had their warrants auctioned by the Treasury are also considered to have exited the programs, as are institutions that declared bankruptcy.

The proceeds from both TARP warrant repurchases and auctions have largely fueled the profitability of the programs. The redemptions of the preferred shares alone generally only provide the government a 5% return, which comes from the dividends. American Express Co.'s and Goldman Sachs Group Inc.'s warrant repurchases in July 2009 helped create some of the largest annualized company returns at 23.3% and 20.0%, respectively. According to Linus Wilson, a finance professor at the University of Louisiana at Lafayette, Goldman Sachs' warrant represented one of the best deals for the American taxpayer, as reported by Bloomberg News on July 22, 2009. Wilson said that based on his calculations, Goldman Sachs paid 98% of the value of the warrants.

Overall, 64 institutions have fully redeemed their preferred stock issued under TARP. Of those, 39 have repurchased warrants, while seven have had their warrants auctioned by the Treasury. In sum, institutions that have exited the programs, plus those 18 that have fully redeemed their TARP preferred stock but still have their warrants held by the Treasury, returned 7.6%, as of March 30.

http://www.snl.com/interactivex/article.aspx?CDID=A-10875237-11824

Dont tell this to the teabaggers, it will make them sad.

[Tarheel_Dem]

1. Not just the teabaggers, but anyone who frequents WSWS, will be heartbroken as well. (nt)

[HughMoran]

5. Wall Street Whining Syndrome?

:D

[Tarheel_Dem]

9. Good one Hugh.

:thumbsup:

[elias7]

7. Water Street Whale Shop? I used to love that place...

[Kdillard]

2. Thanks k and r.

[boppers]

3. But I thought we gave money away to Banks!

:sarcasm:

[babylonsister]

4. Darn, more good news. Rec'd. nt

[Better Today]

6. As pointed out numerous times before though, there was way

more invested in the bailout that just the TARP, so in the long run it has been in the trillions, not the 780B that is exclusively TARP.

Not that it's bad that 8.5 was gotten, but it doesn't cover the entire bank bailout considerations, by a long shot. And since none of it is filtering down to Main street or small businesses, I don't see it as an overall good thing.

[NJmaverick]

8. K & R!

[Cali_Democrat]

10. An avalanche of GOOD news lately

Republicans and DU Obama haters must be frustrated!

[ClarkUSA]

11. President Obama, Geithner and Sommers deserve alot of kudos for making TARP II happen. n/t

[girl gone mad]

12. Yeah, just ignore the $$$$Trilions funneled out the backdoor from..

TALF, PPIP, TGLP, CAP, TIP, CPFF, AMLF, MMIF, Homebuyer credit, tax forgiveness schemes, Fed MBS purchase program (remember - this was what TARP was supposed to be for in the first place but the liars never used it to buy toxic assets since they figured out there was a much less transparent way to do that!!), the now unlimited Fannie and Freddie bailout, the $270B we paid JP Morgan to get them to borrow (wtf?), etc..

I think you're going to need a bigger catapult.

:rofl: