U.S. Fetches $15.4 Million for Washington Federal Warrants

BY DARRELL A. HUGHES

WASHINGTON -(Dow Jones)- The U.S. government sold its warrants to purchase shares of Washington Federal Inc. (WFSL) stock for $15.4 million, the Treasury said Wednesday.

The Treasury received warrants in several financial institutions as a means of maximizing returns on a $700 billion government effort to rescue the financial sector.

Treasury said it has commenced secondary public offerings of 1,707,456 warrants to buy stock of Washington Federal.

Treasury sold Washington Federal’s warrants with a strike price of $17.57 a share for $9.15 each. Bidding on those warrants, which expire in November 2018, started at $5 a share.

Prices for those warrants came below the upper end of the range expected by Linus Wilson, a University of Louisiana at Lafayette finance professor who has been tracking Treasury warrant auction data. Wilson projected the warrants would fetch between $5.92 and $9.94 a share.

Last week, Treasury said it sold its warrants to purchase shares of Bank of America Corp. (BAC) stock for $1.5 billion. That figure represents the most the Treasury has earned yet from its sale of warrants in a single institution, beating results both from other auctions as well as from privately negotiated sales.

The Treasury still holds warrants for shares in several banks that have paid back at least a portion of government aid they received, including Citigroup Inc. (C), Wells Fargo & Co. (WFC) and PNC Financial Services (PNC).

Treasury announced offerings of 595,829 warrants to buy Signature Bank (SBNY) stock and 758,086 warrants to purchase stock of Texas Capital Bancshares Inc. ( TCBI).

The Signature Bank auction began on Wednesday at 8:00 a.m. EST, and is slated to end at 6:30 p.m. EST. The minimum bid price per warrant is $16.00.

The Texas Capital auction starts Thursday at 8:00 a.m. EST, and ends 6:30 p.m. EST. The minimum bid price per warrant is $6.50.

-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684; darrell.hughes@ dowjones.com

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