The U.S. Treasury approved 10 banks to buy back $68 billion of government shares, reducing officials’ authority to intervene in everything from lending and hiring strategies to compensation policies.
“These repayments are an encouraging sign of financial repair, but we still have work to do,” Treasury Secretary Timothy Geithner said in a statement released in Washington today.
The Treasury said today that, combined with other repayments already received from other firms, the government will have received about $70 billion. Dividend payments on the shares issued to the government under the Capital Purchase Program total about $4.5 billion to date, including $1.8 billion from the 10 banks, the department said.
Firms buying back the government’s preferred shares also have the right to repurchase warrants the Treasury holds “at fair market value,” today’s statement said.
If you though the govt got hammered with its warrant sales thus far, just wait til you see this.
Disclosure: long bank debt, preferred and equity