TARP Buys Another $395 Million Through Capital Program

The Treasury Department on Tuesday announced details on capital investments in another 28 financial institutions — 24 of which are privately-held — on Feb. 27. So far, the Treasury has purchased $196.76 billion in preferred stock through the Troubled Asset Relief Program in an attempt to shore up financial institutions and unclog credit markets. Of the $394.9 million invested Friday, 47.3 percent was given to publicly-traded firms, while the majority — 52.7 percent — was invested in privately-held firms. The Treasury completed its smallest-ever Capital Purchase Program transaction Friday when it invested $541,000 in Limerick, Pa.-based The Victory Bank. Meanwhile, the Evansville, Ind.-based Integra Bank Corp. (IBNK) claimed the largest capital purchase of the day — $83.59 million. All told, the TARP had dispensed — and promised — a total $326.54 billion as of Friday through its various programs, including the Targeted Investment Program, the Systemically Significant Failing Institutions program, the Asset Guarantee Program and the Treasury’s $20 billion share of the Fed’s Term Asset-Backed Securities Lending Facility, which rolled out Tuesday and which aims to lend up to $200 billion initially to owners of AAA-rated securities backed by auto loans, credit card loans, student loans and SBA-guaranteed small business loans. The Treasury on Friday announced it would work with Citigroup Inc. (C) to exchange common stock for preferred securities purchased through the CPP. On Monday, the Treasury announced it had reached an agreement with American International Group Inc. (AIG) to fund restructuring efforts with up to $30 billion in additional TARP funds in exchange for preferred stock through a new and upcoming equity capital facility. The shaky week for the financial sector sparked investor fears that the U.S. banking system might not hold itself up outside of at least partial nationalization. The Ethisphere Institute reported for the week ending Feb. 27, TARP investments had lost another $5 billion from an original $306.1 billion. Visit www.ustreas.gov for further details on the TARP. HousingWire recently looked into the specifics of the TARP’s many investments, which will be featured in the upcoming March issue of the magazine, set to hit mailboxes this week. Don’t forget to subscribe. Write to Diana Golobay at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.