Treasury kicks off auctions of TARP’s CPP securities

140px-US-DeptOfTheTreasury-Seal.svgThe Treasury began auctions on Monday for its Troubled Asset Relief Program’s Capital Purchase Program preferred stock and subordinated debt positions in eight banks.

The auctions will be held in Alarion Financial Services, ColoEast Bankshares, Commonwealth Business Bank, Crosstown Holding Company, Fidelity Federal Bancorp, Mountain Valley Bancshares, Omega Capital Corp. and Premier Financial Corp.

During the auction period, which is expected to close on Thursday, potential bidders for CPP securities can place bids in increments of $0.01 at or above the minimum prices set forth in the applicable bidder letter. Investors can bid on individual or multiple CPP securities.

To date, the Treasury has recovered $271 billion from TARP’s bank programs through repayments, interest, dividends and other income. Approximately $2 billion in repayments were refinanced under the Small Business Lending Fund, which allows the Treasury to permit CPP institutions to repay TARP funds through program borrowing.

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