Bank of America to return $45 billion in bailout money("F*ck that bailout money, we ballin over here")
Editor’s Note: Not a direct quote^^
NEW YORK (CNNMoney.com) — Bank of America said late Wednesday it planned to return the entire $45 billion in bailout money it received from the government over the past year.
The move would allow Bank of America, the nation’s largest lender, to wriggle free from a variety of government restrictions it has had to abide by, including pay caps for its top executives.
It could also smooth what has been a difficult search for a new chief executive.
Outgoing CEO Ken Lewis is scheduled to depart by year end. Bank of America’s board of directors originally hoped to select a successor by Thanksgiving.
“We believe that this is good news, not only for the U.S. taxpayer and our company, but for the country as it is a milestone indicating that public policy has succeeded in helping our industry and the economy begin to recover,” Lewis said in a statement.
The payback would be made largely through the sale of $18.8 billion of securities that would convert into common stock, according to the company. The stock sale will be put to a shareholder vote in coming months.
In addition, the bank said it would supplement the $18.8 billion with $26.2 billion in cash.
Last fall, as the government tried to stabilize the financial markets, Bank of America received $25 billion in aid under the Troubled Asset Relief Program, or TARP.
That number grew to $45 billion in the following months as the bank sought to cover losses it absorbed through its purchase of Merrill Lynch at the height of the crisis in September 2008.
There had been speculation earlier this fall that the company was exploring options to pay back part of the money it had received from the government.
But many believed that it would be at least several more months before the Charlotte, N.C.-based lender could get completely out from under the government’s thumb.
The move, of course, will save Bank of America from having to make any further dividend payments on aid it received from the government. So far this year, the company has paid out $2.54 billion to the Treasury Department.