Bank of America to pay $425 mln to end federal guaranteeBank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. said Monday it had agreed to pay 425 million dollars to the US government to exit a guarantee program put in place to cover potential losses in its takeover of Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. . "We are pleased to resolve this matter and move forward," Kenneth Lewis, chief executive and president of Bank of America Corporation, said in a statement. The agreement ends a government guarantee of up to 118 billion dollars in assets that authorities offered to pave the way for Bank of America's acquisition of Merrill Lynch in January 2009. BofA had considered pulling out of the government-orchestrated takeover after learning of Merrill's heavy losses. Under the pressure of authorities, Lewis completed the takeover, and the US Treasury raised its aid to the bank from the Troubled Asset Relief Program to 45 billion dollars from 25 billion dollars. In addition to the 45 billion taxpayer dollars from the TARP, the US government also agreed to guarantee 90 percent of any losses on a 118-billion-dollar pool of risky assets owned by the bank and Merrill Lynch. It was this guarantee that the bank and the government agreed to terminate Monday. Lewis has publicly chafed chafe v. chafed, chaf·ing, chafes v.tr. 1. To wear away or irritate by rubbing. 2. To annoy; vex. 3. To warm by rubbing, as with the hands. v.intr. at the government intervention that accompanies the public aid. In its statement Monday, the bank recalled that it has taken several steps toward reducing its reliance on government support and return to normal market funding, notably by raising capital and issuing 10 billion dollars in bonds that are not backed by the government. The biggest US bank by assets also underscored that the government had not converted the preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. it received in exchange for the TARP funds to common stock. "We are a stronger company than we were even a few months ago, and while we continue to face challenges from rising credit costs, we believe we have all the pieces in place to emerge from this current economic crisis as one of the leading financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. firms in the world," Lewis said. The announcement was made after the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. closed. BofA shares edged up 0.06 percent in electronic trading  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. to 17.26 dollars, less than half its value a year ago. 
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion