The U.S. Treasury Department announced plans to sell off warrant positions in four banks, including Bank of America Corp. (BAC) on Thursday.
The treasury will do away with of warrants forwarded beneath investments in Federal aid programs for big banks. Among these, the Capital Purchase Program and Targeted Investment Program were initiated by the Treasury to help bolster the recovery of the financial system after the crash.
Over the course of the coming weeks, the treasury will begin auctions selling offing warrant positions in Signature Banks (SBNY), Bank of America, Washington Federal Inc. (WFSL) and Texas Capital Bancshares.
The sales, which will occur via public offering, are intended to endow taxpayers with added returns outside dividends received on preferred stock. They will employ the Dutch auction tactic that establishes a market price using investor submitted bids.
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