• Bank of America to Repay $45 Billion in TARP Funding
  • December 11, 2009
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • Yesterday, Bank of America Corporation issued a press release announcing that it will repay $45 billion in TARP investments made by the U.S. Treasury under the Capital Purchase Program and the Targeted Investment Program. 

    All of the shares of senior preferred stock issued to Treasury will be repurchased, but Bank of America is not exercising its right to repurchase the related warrants “at this time.”  Bank of America has previously paid $2.54 billion in dividends on Treasury’s TARP preferred stock.  Bank of America “plans to repay the $45 billion in TARP funds using $25.2 billion in excess liquidity and $18.8 billion in proceeds” from the sale of “common equivalent securities.”

    Bank of America has also agreed to “increase equity by $4 billion through asset sales to be approved by” the Federal Reserve, and to raise “up to approximately $1.7 billion through the issuance of restricted stock” to certain employees “as part of their normal year-end incentive payments.”