Ally Financial said late Wednesday that the U.S. Treasury will be repaid $2.7 billion from the sale of all the Trust Preferred Securities that the agency holds in the bank holding company and mortgage lender.
"This represents the full value of Treasury's investment in these securities," the company said in a statement. "The offering priced today at 8.125 % and is expected to close on March 7, 2011. In addition to the proceeds from this transaction, Ally has paid approximately $2.2 billion in dividends on the Treasury investment to date."
Early Wednesday, the Treasury announced that it would offer in the public market $2.7 billion worth of trust preferred securities (TruPs) it holds in the bank.
However, the sale will have no effect on the government 74% stake in Ally's common stock.
Treasury hopes to take Ally public some time this year via an IPO.
Regarding the TruPs, Ally CEO Michael Carpenter said, "This transaction marks a key step in the company's plan to repay the U.S. taxpayer in full."
To date, Ally has received more than $15 billion in federal aid.