BofA warrants raise $1.57 billion

5 March 2010

The US Treasury announced it raised $1.57 billion in an auction of warrants held following the bailout of the Bank of America (BofA).

According to the government, the completion of the sale means it is now divested of any investment in BofA.

It is also the highest amount taken from a warrant sale of securities in one institution.

The A and B class warrants sold in the auction were priced at $8.35 and $2.55 respectively.

Bernard Chriqui, a New York-based trader at Nomura Securities International Inc., told Bloomberg that the US Treasury received a “good price” for the securities.

“The A warrants were picked up at a fair value by investors with a longer-term outlook, versus opportunistic investors looking to make a short-term profit.

Previously, the highest amounts made through auctions of this kind were $936 million in a sale of stock connected with JPMorgan and $1.1 billion from warrants repurchased by Goldman Sachs.

The Treasury is currently looking to recover money lent to banks as part of its Troubled Asset Relief Program.

Banks borrowed up to $700 billion via the scheme to help survive during the global credit crunch.

By Jim Ottewill

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