Sunday, December 13, 2009

Bank of America makes first TARP payment

Bank of America, based in Charlotte NC will begin paying pack the Troubled Asset Relief Program (TARP) for money loaned to it during the financial turmoil last year. The total amount owed is 45 billion dollars with 19.3 billion being paid back on December 3rd with a preferred stock sale. Bank of America purchased troubled Merrill Lynch last year during the height of the financial crises amid some controversy. The purchase of Merrill is already paying off with Bank of America having more of an international presence in investment banking as well as a large, well regarded army of retail brokers. By beginning to pay back TARP, Bank of America will soon free of government restrictions on executive and bonus pay and is a signal to the market that it is a healthy institution. After the announcement of the preferred stock sale, BofA shares rose .7% in NYSE trading. Being one of the largest employers and internship providers to Wake Forest Schools of Business students, the repayment of TARP should bode well in terms of increased full time offers and internship positions.

By: Jason Wu - WFU MBA 11'

For further information, please see full Bloomberg article:

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