US Treasury to auction off Capital One Financial warrants

2 December 2009

The US Treasury is to auction off warrants in Capital One Financial on Thursday 3rd December in its first sale of assets acquired by the government under the bailout program.

Almost 13 million warrants will be divested, at a minimum price of $7.50 per warrant, and investors have to bid for at least 100 of them.

Shares in Capital One Financial fell 0.7 per cent to $38.10 following the news.

The organization received around $3.5 billion in taxpayer money last year after big losses in its credit card business.

Although the bank has paid back the bailout cash, the funds were issued in exchange for preferred shares and stock warrants, meaning the Treasury has the power to carry out its auction tomorrow.

"The proceeds of this sale will provide an additional return to the American taxpayer from Treasury's investment in the company beyond the dividend payments it received on the related preferred stock," a government statement said.

By Tony Aynsley

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