Bank of America Corporation has made its first dividend payment to the U.S. government under the Troubled Asset Relief Program.
The payment, totaling $402 million, reflects Bank of America’s ongoing commitment to paying back U.S. taxpayers. The payment represents the dividend on the Fixed-Rate Cumulative Perpetual Preferred Stock issued in connection with the $45 billion in government investments that Bank of America received in late 2008 and early 2009.
Approximately $223 million relates to the federal government’s $15 billion investment in Bank of America made under the Capital Purchase Program of the Troubled Asset Relief legislation and an additional $50 million relates to the federal government’s $10 billion investment in Bank of America as part of the agreement to acquire Merrill Lynch & Co., Inc.
The remaining $129 million stems from the government’s $20 billion investment on 16 January to help facilitate the acquisition of Merrill Lynch. Total cash dividend payments to the government in 2009 will reach approximately $2.8 billion.
“It is our intention to pay back these loans, as soon as possible,” says Ken Lewis, chairman and chief executive officer, Bank of America. “In the meantime, we are using these funds to support the U.S. economy by extending credit to individuals and businesses.”
L.D.