Treasury Sells Webster Bank Warrants
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON (AP) _ The government says it received $20.4 million
from the sale of warrants it held in Webster Financial Corp., the
latest move to recoup costs from the $700 billion financial bailout
The Treasury Department said Friday it received $6.30 for each
warrant in the auction that took place on Thursday. Treasury had
set a minimum bid price of $5.50 per warrant. Buyers of the 3.28
million warrants will have the right to purchase Webster Financial
stock at $18.28 per share.
Webster Financial, a bank based in Waterbury, Conn., received
$400 million from the federal government in November 2008 at the
height of the financial crisis. It completed repayment of the money
in December 2010. The warrant sale severs its last link to the
government’s Troubled Asset Relief Program.
Stock in the company closed at $19.86 in trading Thursday. Over
the past year, the price has ranged from a low of $15.56 to a high
With the warrants selling for $6.30 each, that will mean that
the stock will have to be trading above $24.58 for the buyers of
the warrants to make a profit on their purchases.
Of the $700 billion Congress authorized for the bailout program,
the government ended up distributing about $411 billion.
Banks received the largest share of the bailout, approximately
$245 billion. Treasury has received $253 billion in return from
repayments, dividends and proceeds from the sale of warrants.
The rest of the $411 billion in bailout support was distributed
to the auto companies, various housing programs and insurance giant
American International Group.
(Copyright 2011 by The Associated Press. All Rights Reserved.)