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Signature Bank warrants bring $11.15 million
Staff and agenciesBy MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 15 mins ago
The Treasury said Thursday that it sold 595,829 warrants in an auction with a sales price of $19 per warrant. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price.
The auction for Signature Bank followed an auction Tuesday for warrants of Seattle‘s Washington Federal Inc. which raised $15.39 million for the government. The Treasury is holding a third auction Thursday for warrants of Texas Capital Bancshares Inc. Those auction results will be announced Friday.
Under the terms of the auction, the owner of the warrants will have the right to purchase Signature Bank stock at a price of $30.21 for a period lasting until Dec. 12, 2018. Under those terms, it will mean that the stock price will have to be above $49.21 for investors to break even in terms of getting back the amount paid for the warrant plus the amount the investor would pay for the stock at a strike price of $30.21.
The sale of the warrants represents the last link that Signature Bank had with the government‘s $700 billion bailout fund known as the Troubled Assets Relief Program.
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