(AFP) – Dec 9, 2009
WASHINGTON — Bank of America said Wednesday it had completed repayment of 45 billion dollars to the US government from a capital injection under a program to stabilize the financial system.
The repayment, announced a week earlier, followed "the successful completion of a securities offering," a Bank of America statement said.
The company sold 1.286 billion "common equivalent securities," generating roughly 19.29 billion dollars, which was used along with existing liquidity to repay the US Treasury for funds from the Troubled Asset Relief Program.
The company also paid 190 million in dividends on the Treasury's preferred shares.
"We owe taxpayers our thanks for making these funds available to the nation's financial system and to our company during a very difficult time," said chief executive Kenneth Lewis.
"Now that we have cleared this significant hurdle, which demonstrates the strength of our company, we look forward to continuing to play a key role in the economic recovery and helping to meet the changing needs of our customers and clients."
The largest US bank by assets made the largest single payback under the TARP, a program approved by Congress last year at the height of the financial crisis.
The action by Bank of America leaves two major banks still holding US government capital from the program: Wells Fargo, which received 25 billion dollars, and Citigroup, with some 45 billion dollars.
CNBC television reported that Citi planned an announcement as early as Thursday that it would be raising new equity under an plan to repay TARP funds.
But Citi's situation is complicated by the fact that the US Treasury converted some of the capital into common shares and owns a stake of about one-third of the banking giant.
CNBC said Citigroup would raise some 20 billion dollars in new shares.
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