Gov't shifts way of selling some company warrants

AP News
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Posted: Nov 08, 2011 9:44 AM
Gov't shifts way of selling some company warrants

The government plans to begin selling some warrants it received from bailed-out companies to financial institutions rather than offering the warrants in public auctions. The sales are part of the government's effort to recoup the costs of the $700 billion financial bailout.

The Treasury Department said Tuesday that it will hold private sales to institutional buyers of warrants in some of the hundreds of smaller banks that benefited from the bailout fund. The warrants give buyers the right to buy common stock at a fixed price.

Treasury says the new process will be used over the next few weeks because the holdings are too small to justify the cost of holding a public auction.

The government received the warrants after giving banks money from the bailout fund during the 2008 financial crisis. Banks financial firms and U.S. carmakers received $413.4 billion from the taxpayer-funded bailout. So far, the government has recovered $317.3 billion. Roughly $9 billion of that has come through the sale of warrants.