The Treasury Department announced plans to auction off $272 million warrants for Bank of America stock as a means of recovering Federal dollars borrowed by the institution during the bailout. Warrants permit the holder to purchase stock in the future for an established price. The auction will begin Wednesday at 8 a.m. EST according to an announcement from the Treasury department. The warrants will be split into two classes of A warrants and B warrants. 150.38 will be considered A warrants at a minimum bidding price of $7 per warrant while the remaining 121.79 warrants will fall into the category of B warrants, that have a minimum bid price of $1.50 per warrant.
Bank of America has already put $45 billion toward repaying the government. In December of 2009, the bank sought to distance itself from the bailout program and the consequences their involvement had on their practices. The company received $25 billion from the Troubled Assets Relief Program in Octorber 2008 and an additional $20 billion in January 2009 after it’s acquisition of Merill Lynch. Wednesday’s warrant sale is the result of the financial institution and the Treasury Department’s failure to agree on the worth of the warrants.
The auction will be conducted by Deutsche Bank Securities Inc.
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