TARP Capital Exit Strategy (CaPP Public Institutions*)

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Summary: Exiting the Treasury capital investment under the Capital Purchase Program (does not address Capital Assistance Program)

• Capital Purchase Program participants sold senior preferred stock and issued warrants to Treasury

• Repurchase by issuers of these securities is:

o governed by contracts with Treasury and

o subject to the Emergency Economic Stabilization Act of 2008 (Stabilization Act) and

o subject to the American Recovery and Reinvestment Act of 2009 (Recovery Act)

• Treasury has published limited information on the procedures for repurchasing/redeeming CaPP securities

• The American Recovery and Reinvestment Act (Recovery Act) amends provisions of the Emergency Economic Stabilization Act (Stabilization Act) applicable to the Capital Purchase Program – but Treasury has provided very limited information on the new law

* NOTE: warrants issued by private institutions were immediately exercised by Treasury

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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