The government says it will sell warrants it holds in Webster Financial Corp. in its latest move to recoup costs from the $700 billion financial bailout program.
The Treasury Department said Wednesday that the auction of 3.28 million warrants will take place on Thursday. The minimum bid price is set at $5.50 per warrant. Purchases of the warrants give the buyer the right to buy Webster Financial stock at $18.28 per share.
Webster Financial, a bank based in Waterbury, Conn., received $400 million from the federal government in November 2008 at the height of the financial crisis. It completed repayment of that money in December 2010.
Stock in the company closed at $20.86 in trading Tuesday. Over the past year the price has ranged from a low of $15.55 to a high of $23.73.
The sale of the warrants will sever the last link Webster Financial has to the government bailout program. That will remove restrictions on executive compensation and dividends.
Of the $700 billion Congress authorized for the bailout program, the government ended up distributing about $411 billion.
Banks received the largest share of the bailout, approximately $245 billion. Treasury has since received $251 billion in return from repayments, dividends and proceeds from the sale of warrants.
The rest of the $411 billion in bailout support was distributed to insurance giant American International Group, the auto companies and various housing programs.