Tuesday, June 22, 2010

Boston Private Repays TARP, Carlyle Invests More

WSJ reported:

Boston Private Financial Holdings Inc. (BPFH) said it plans to sell 1.1 million shares to the Carlyle Group. It would raise about $6.3 million.

Boston Private, which owns wealth- and investment-management firms, last week also redeemed the final $104 million of equity held by the U.S. Treasury Department under the Troubled Asset Relief Program.

The story didn't mention Treasury's stock warrants. The S-1 cites 8.3 million potentially issuable shares from outstanding warrants, but provides no breakdown of ownership. Other SEC filings indicate Treasury's right to buy nearly 2.9 million shares of Boston Private Financial Holdings, Inc.

The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to certain anti-dilution and other adjustments, equal to $8.00 per share of the Common Stock.

It's not clear how the warrant price will be adjusted given Boston Private's recent stock offerings. It's clear BPFH enjoyed government provided capital for nearly two years.

11-21-08 received $154 million in TARP funds
1-13-10 repaid $50 million
6-16-10 repaid the remaining $104.4 million

Here's BPFH spin from Chairman and CEO Timothy L. Vaill:

“We are pleased to have supported the U.S. Treasury’s efforts to stimulate the economy and were able to increase our lending as a result of the capital we received in late 2008. "

Stimulating wealthy, politically connected people? It takes a professional...