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State Street plans $1.5bn share sale as moves to repay TARP funds
STATE Street yesterday revealed plans to sell $1.5bn of stock and will also sell notes to help repay government bailout funds, as it took a $3.7bn charge to move some assets onto its balance sheet at a loss.
The Boston-based custodial bank and asset manager said it will use proceeds from the securities sales to help repay a $2bn infusion from the Troubled Asset Relief Programme (TARP).
It said the debt offering would not be backed by the federal government. Issuing such debt is a requirement for paying back TARP.
Many banks want to repay TARP funds because of restrictions imposed by the government, including on executive pay, and because holding the funds is viewed as a sign of weakness.