Treasury Department selling TARP warrants at 34% discount - Business First of Louisville:

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Through the Troubled Asset Relief knownas TARP, the Treasury Departmentr purchased preferred stock and warrants from bankxs in an effort to prop up lending. Warrants, whichj give the holder the right to buya company’s stocmk at some point in the future for a specifix price, presented a lot of potential upsids for taxpayers, should bank stock prices rise abovwe the face value of the warrants. Many banks have sought to buy back their preferre d shares and warrantsfrom Treasury.
“Because the warrants that accompaniesd TARP assistance represent the only opportunity for the taxpayer to participate directly in the increase in the share prices of banks made possible by public the price at which the warrantws are sold is thepanel said. The panel, charged with determining whether taxpayersd are receiving maximum benefit fromthe TARP, conducted its own valuatiohn of the warrants the Treasury It found that the 11 banks that have repurchasexd their warrants from the Treasury for a total amount that the panel estimates to be only 66 perceng of current market value, shortchanging taxpayers by $10 The Treasury is still in the early stage of its warrant repurchase program, and the panepl acknowledges that the prices thus far may not be representatives of what is to