Connect with us

Hi, what are you looking for?


Bank of America warrant holders could reap 4,000% returns

By Emma Orr

Holders of a little-known security tied to Ban..

By Emma Orr

Holders of a little-known security tied to Bank of America Corp.'s stock price may be rolling in the dough.

A series of securities known as Bank of America TARP B warrants, issued in the wake of the financial crisis in 2009 with a strike price of $30.79, are set to pay out after the stock surged past that point for the first time on Friday. Shares closed at $31.19, up from $30.66 a day earlier.

The warrants last traded at $2.86, the highest price in more than six years. They were issued at $2.55 and fell to a record low of less than 7 cents in 2016. Holders who bought around that low price have reaped returns of almost 4,000 percent on their investment.

Michigan's state treasury is the largest holder, with more than 10 million warrants. Its first registered holding date is Sept. 30, 2014, when the price was 96 cents, and the average cost of its warrants is 79 cents. Billionaire hedge fund manager John Paulson is the next-biggest holder with almost 9 million warrants. Paulson & Co. registered its first holding in 2010, and bought the warrants at an average price of $2.53 each.

The warrants were originally issued to the government through the Troubled Asset Relief Program, and were later auctioned off by the U.S. Treasury. They traded at less than $1 for more than five years, reflecting investor doubt that Bank of America's stock would ever reach the strike price.

The bank's stock traded as low as $11.16 in 2016, but the price has almost tripled from that point as rising interest rates and decreased regulation under the Trump administration renew investor confidence.

The attainment of the strike-price threshold was reported earlier by the Wall Street Journal.

Original Article


ET Markets



In an interview with ET Now, Dabur India Director Mohit Burm..


The 147th Open championship will be at Carnoustie Golf Club in Scotland. Jan Kruger/R&A Golfers ..


Enlarge Oliver Morris/Getty Images) In response to an Ars re..


Enlarge/ You wouldn't really want to use Nvidia's ..