Goverment Gives $20B To BofA
TheStreet.com among others are reporting a handout given to Bank Of America by the United States Government in the sum of $20Million in exchange for preferred stock with an 8% dividend return. Also Bank Of America will also need to comply with enhanced executive compensation restrictions and implement a Loan Modification program.
Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8% dividend. The bank will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program, Treasury said.
The injection of fresh capital will come from the government’s $700 billion rescue fund and will be similar to assistance provided in November to another troubled bank, Citigroup(C Quote - Cramer on C - Stock Picks).
Before the new support package, Bank of America had received a total of $25 billion in capital injections from TARP, including $10 billion for Merrill Lynch.
