State Street’s application to repay the full amount of the US Department of the Treasurys investment in the company under the TARP Capital Purchase Program (CPP) has been approved.
As a result, State Street expects to redeem all of the 20,000 shares of its Series B fixed-rate cumulative perpetual preferred stock purchased in the US Treasurys $2.0 billion October 2008 CPP investment. State Street will also initiate discussions with the US Treasury for the repurchase of the common stock purchase warrant issued to the US Treasury in October 2008. That warrant, initially exercisable for 5,576,208 shares of State Streets common stock, now represents an interest to purchase 2,788,104 shares. Due to State Streets successful completion of a qualified public offering of common stock in May 2009 with gross proceeds ($2.3 billion) in excess of the amount of the US Treasurys CPP investment, the number of warrant shares was reduced by one-half in accordance with the terms of the warrant.
We have consistently supported the objectives of the Capital Purchase Program and believe our participation in the program, as one of the nine banks asked to initiate it, has assisted the federal governments efforts in stabilizing the financial markets,” said Ronald E. Logue, chairman and CEO of State Street. As a result of improving financial market conditions and our strong capital position, State Street has been able to replace the government’s CPP funds with private capital, in keeping with the Treasurys original intent.