Regional banking issue Comerica (CMA) is in focus today, after announcing last night that it will sell $800 million in common stock in order to repay its debt to the U.S. government. Under the terms of the Troubled Asset Relief Program (TARP). Comerica owes Uncle Sam about $2.25 billion. At this point, the Dallas-based bank is among the few remaining financial institutions yet to repay its TARP debt.

This morning, Comerica priced its common stock offering at $35 per share, representing a discount to Monday's close at $36.29. The shares have quickly backpedaled as a result, slipping below recent support at their 10-day and 20-day moving averages.

Continue reading Comerica Selling Stock to Repay TARP Debt

Comerica Selling Stock to Repay TARP Debt originally appeared on BloggingStocks on Tue, 09 Mar 2010 10:30:00 EST. Please see our terms for use of feeds.

Maybe Goldman Sachs (GS) does care what outsiders think about it. The company has come under plenty of fire this year for its post-financial crisis bonus payments, especially after having accepted TARP money from the government. In order to keep the world off its back, the bank is going to pay managers their annual bonuses in stock this year instead of cash.

And the stock issued will have to be held for five years. So, recipients will have a long-term stake in the company. But it seems they're being compensated for that, too as GS is spending a total of over $20 billion in compensation.

Continue reading Goldman Sachs to pay $20 billion bonuses in stock, not cash

Goldman Sachs to pay $20 billion bonuses in stock, not cash originally appeared on BloggingStocks on Fri, 11 Dec 2009 09:40:00 EST. Please see our terms for use of feeds.

The bailouts of late 2008 and 2009 have cost the American taxpayers $61 billion, according to the Treasury Department, but the banks aren't to blame this time. The auto manufacturer bailout, which includes Chrysler and General Motors (GRM), has cost the country more than $30 billion, with American International Group (AIG) consuming another $30 billion.

Meanwhile, Bank of America (BAC) has already made good with the government, and several banks -- such as Capital One (COF), JP Morgan Chase (JPM) and TCF Financial (TCB) -- only have to clean up situations regarding the warrants they've issued. And interestingly, the losses from the bailouts on AIG and auto manufacturers are being offset by profits from the bank bailouts, which could generate additional funds of up to $19.5 billion.

Continue reading Banks subsidizing auto TARP, extra money could be spent

Banks subsidizing auto TARP, extra money could be spent originally appeared on BloggingStocks on Thu, 10 Dec 2009 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Capital One warrants help chip away TARP obligation

Capital One warrants help chip away TARP obligation originally appeared on BloggingStocks on Sun, 06 Dec 2009 15:40:00 EST. Please see our terms for use of feeds.

American International Group (AIG) is a step closer to paying back the U.S. government. The insurer has announced that it's planning to float American International Assurance on the Hong Kong stock exchange. A date hasn't been selected yet, but the decision isn't much of a surprise, given that AIG moved it into a special unit, a signal that some sort of liquidity event was on the way.

According to Robert Benmosche, the company's CEO, "The planned listing is in the best interests of policyholders, distribution partners, AIG shareholders and US taxpayers." He continues to say that AIA's roots are in Asia, which made a Hong Kong listing "a natural choice." The timing, according to AIA president and CEO Mark Wilson will depend on marketing conditions and regulatory approvals.

Continue reading AIG sending international life unit public in Hong Kong

AIG sending international life unit public in Hong Kong originally appeared on BloggingStocks on Fri, 04 Dec 2009 08:40:00 EST. Please see our terms for use of feeds.

As planned, Bank of America (BAC) sold securities to raise the capital it needs to settle with the government. The company announced this week that it would repay the $45 billion in bailout money it received under the Troubled Asset Relief Program (TARP). Bank of America raised $19.3 billion, slightly more than the $18.8 billion it originally sought.

Bank of America sold 1.286 billion "common equivalent" securities, which are comprised of a depositary share and a warrant. The security is convertible into one common share of Bank of America, upon approval by shareholders. The rest of the money will come in the form of cash.

Continue reading BofA raises more than $19 billion, on track to make good with the feds

BofA raises more than $19 billion, on track to make good with the feds originally appeared on BloggingStocks on Fri, 04 Dec 2009 08:00:00 EST. Please see our terms for use of feeds.

Bank of America (BAC) surprised the market on Wednesday by announcing that it would repay the $45 billion in TARP money it received over the next few days. This gives the company much more flexibility in compensating its employees, but it could leave the bank exposed to future economic shocks.

CEO Kenneth Lewis, who's expected to retire at the end of the month, said he wanted to take care of this before leaving the firm. This decision comes at a great time for the Treasury Department, which has been feeling the heat for committing taxpayer resources to a dicey problem without seeing much progress yet.

Continue reading BofA to repay TARP money, rest to follow?

BofA to repay TARP money, rest to follow? originally appeared on BloggingStocks on Thu, 03 Dec 2009 08:30:00 EST. Please see our terms for use of feeds.

Auditor wants more TARP information originally appeared on BloggingStocks on Mon, 20 Jul 2009 11:40:00 EST. Please see our terms for use of feeds.

Following a meeting with CEO Jamie Dimon on Feb. 6, Citigroup analyst Keith Horowitz believes that JPMorgan Chase & Co. (NYSE: JPM) could be among the first banks to repay its indebtedness under the government's Troubled Asset Relief Program (TARP).

"Clearly there is a risk of future government interference, which is why we believe management would like to get out," noted Horowitz. However, while Dimon thinks banking industry returns will be compressed during the intermediate term due to the government's involvement, he doesn't see any significant changes to JPMorgan's long-term outlook.

Continue reading Will JPMorgan Chase be the first to repay its TARP loan?

Will JPMorgan Chase be the first to repay its TARP loan? originally appeared on BloggingStocks on Mon, 09 Feb 2009 12:40:00 EST. Please see our terms for use of feeds.

Options players, start placing your bailout bets: Nasdaq OMX Group (NASDAQ: NDAQ) announced today that it will launch options trading on its Government Relief Index (NASDAQ: QGRI) effective Monday. The 3-week old Government Relief Index was constructed to track the performance of companies that have received at least $1 billion in government funds under the Troubled Asset Relief Program (TARP) or similar bailout endeavors.

Since its launch on January 5, the QGRI has blazed a steady path lower, tumbling 36.8%. "When you have volatility and a direction, you start to see there's an opportunity to put a product on it that allows investors to benefit from the movement," said John Jacobs, Nasdaq's executive vice president, in comments to Reuters. (Is it just me, or is Mr. Jacobs subtly recommending put options on the Bailout Bunch?)

If you do decide to take a speculative gamble on the slipping Government Relief Index, you'll be wagering on such high-profile bailout names as Citigroup (NYSE: C), General Motors (NYSE: GM), Bank of New York Mellon (NYSE: BK), and Goldman Sachs Group (NYSE: GS). Overall, it looks like the QGRI might be traders' best opportunity to turn a profit on their steadily depreciating taxpayer investments. How's that for cold comfort?

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Options trading to start Monday on plummeting Government Relief Index originally appeared on BloggingStocks on Fri, 23 Jan 2009 13:00:00 EST. Please see our terms for use of feeds.