Treasury Department selling TARP warrants at 34% discount - Puget Sound Business Journal (Seattle):

takes-trendsthe.blogspot.com
Through the Troubled Assert Relief Program, known as TARP, the Treasury Departmenty purchased preferred stock and warrants from banksa in an effort to propup lending. which give the holder the right to buya company’ws stock at some point in the future for a specifiv price, presented a lot of potential upside for should bank stock pricese rise above the face value of the warrants. Many bank have sought to buy back their preferre d shares and warrantsfrom Treasury.
“Becausde the warrants that accompaniedc TARP assistance represent the only opportunity for the taxpayer to participate directly in the increase in the shard prices of banks made possible bypublic money, the price at which the warrants are sold is critical,” the panelo said. The panel, charged with determining whethee taxpayers are receiving maximum benefit fromthe TARP, conducted its own valuation of the warrants the Treasurh holds. It found that the 11 banks that have repurchases their warrants from the Treasury for a total amount that the panel estimates to be only 66 percent of currentmarket value, shortchanging taxpayers by $10 million.
The Treasurty is still in the early stages of its warrantrepurchasew program, and the panel acknowledges that the prices thus far may not be representative of what is to