State Street Corp. is issuing a public offering of its common stock and will soon issue a separate offering of non-guaranteed senior notes, with hopes of using the proceeds to repay the $2 billion it borrowed late last year under the governments Troubled Asset Relief Program.
State Street also recorded an after-tax loss of roughly $3.7 billion in consolidating the asset-backed commercial paper conduits it administers onto its balance sheet, according to a State Street news release.
With a book value of $22.7 billion and a fair value of roughly $16.6 as of May 15, pretax losses on those conduit-related assets could reach more than $6 billion, but State Street suggested the vast majority of those paper losses will accrete as interest revenue over the lives of the assets beginning with roughly $475 million expected for 2009, according to the release.
About $1.45 billion in net proceeds are expected from State Streets common stock offering, with Goldman Sachs and Morgan Stanley acting as joint book-running managers.
State Street will notify the U.S. Treasury of its intention to repurchase the stock in the company the government acquired late last year in return for an infusion of TARP-related public money. The government has to approve those plans.