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Text size [+][-]  Monday March 15 2010GLOBAL EDITION

Considered view
09 Jul 2009 20:56

Warranted price

Context News

As of July 1, 11 US banks had bought back warrants issued to the Treasury as part of its investment of funds under the Troubled Asset Relief Programme.

The first bank to do so, Old National, was widely seen as getting too good a deal, buying warrants over $15m-worth of shares back for $1.2m. The most recent, HF Financial, paid $650,000 for warrants over $3.75m of shares – around twice as much for each dollar of shares covered.

 


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The US Treasury sold warrants attached to bailout loans too cheaply to the first bank to buy them back. Since then, it has got its act together, getting much closer to realistic estimates of market value. Good thing too, with the biggest banks’ warrants still outstanding.

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More stories by:  Richard Beales






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