Citi, Wells Fargo repay $45 billion in TARP money

NEW YORK (AP) — Citigroup and Wells Fargo said Wednesday they have repaid the $45 billion in bailout money they received from the government.
Citi (C) said it paid for the previously announced repayment with a recent stock offering that raised $20.5 billion. The offering included $17 billion in common shares and $3.5 billion in what are called tangible equity units, which can be converted into common stock at a later date.

Citi said it also ended its $7.1 billion loss-sharing agreement with the government, which protected the company against defaults on some risky investments. To end the program, the government canceled $1.8 billion of what are called trust preferred securities, but still holds $5.3 billion in those securities, which are a type of debt instrument.

Earlier Wednesday, Wells Fargo (WFC) announced that it had repaid the $25 billion it received in bailout funds.

The company said in a statement that it redeemed the series D preferred stock that it issued to the Treasury in October last year, as part of the TARP program.

As part of the redemption of the preferred stock, Wells Fargo said it also paid accrued dividends of $131.9 million, bringing the total dividends paid to the Treasury Department to $1.44 billion since the stock was issued.

The repayment was made possible in part through Wells Fargo's recent public stock offering, which raised $12.25 billion. The bank sold 489.9 million shares of common stock at $25 per share. The offering was completed Dec. 18.

They are among the hundreds of banks that received bailout money through the Troubled Asset Relief Program. The Treasury Department extended a total of about $453 billion to banks, insurers, automakers and other companies under the program. The government has said it expects total bank repayments could reach $175 billion by the end of next year.

Repayment of the money frees banks from government restrictions, such as executive pay limitations.

The Treasury Department continues to hold warrants to buy Citi stock issued as part of the TARP investment. The government plans to sell its nearly 34% stake in the bank over the next year.

Wells Fargo noted that the Treasury Department still holds warrants to buy approximately 110 million shares of its common stock at a price of $34.01 a share.

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