Four banks have plans to use sales from common stock to repay government loans.
Wired PR News – Four big U.S. banks are reportedly planning to sell billions in common stock to repay government loans. As reported by Reuters, the banks announced their plans on Monday after tests of the government demonstrated they would be able to sustain their operations if the recession deepened without additional government bailout aid.
As noted in the report, Capital One Financial Corp, U.S. Bancorp, BB&T Corp, and Bank of New York Mellon Corp have all sold or expressed intentions to sell a total of $6.55 billion in common stock for repayment of federal funds. Walter Todd, who helps with investments at the South Carolina based Greenwood Capital Associates LLC, is quoted by Reuters as stating of the situation, “They’re trying to get while the getting is good… Fundamentals of banks appear not as bad they were, but they are still not good given the underlying conditions in the economy.”
