A few other TARP parameters:
- The senior preferred shares will pay a cumulative dividend of 5% annually for the first 5 years and will reset to 9% per year after year 5. These shares will be non-voting.
- The senior preferred shares are callable at par after 3 years.
- Prior to the end of 3 years, the shares may be redeemed with the proceeds from a qualifying equity off erring of any tier 1 perpetual preferred or common stock.
- The Treasury will receive warrants to purchase common stock at an aggregate market price equal to 15% of the senior preferred investment. The exercise price on the warrants will be the market price of the participating institutions common stock at the time of issuance (calculated on a 20-trading day trailing average).
Treasury Announces TARP Capital Purchase Program Description
U.S. Department of the Treasury
October 14, 2008