- The Washington Times - Wednesday, June 3, 2009

NEW YORK | Morgan Stanley, JPMorgan Chase & Co. and American Express Co. moved closer to repaying government bailout money, announcing a series of new stock sales.

The stock offers disclosed late Monday and Tuesday are a precondition for the financial companies to pay back loans received under the Troubled Asset Relief Program (TARP) last fall. The Treasury Department is expected to announce next week the first group of banks that will be allowed to repay the money.

Paul Miller, an analyst with Friedman, Billings, Ramsey & Co. said banks want to sell stock so that they can repay TARP as soon as possible and also to take advantage of investors’ current appetite for financial stock.

“The market (for bank stocks) could be open for another three weeks, it could be closed in three days,” Mr. Miller said.

Hundreds of banks received funds as part of the $700 billion program last fall as the government tried to break a logjam in lending and in credit markets. The largest recipients are now itching to unburden themselves of the loans and the government oversight that comes along with them, although the government must approve any applications from banks to repay the funds.

“They want to get out from under the ‘Scarlet T’ as fast as possible,” Mr. Miller said.

A big reason why banks are anxious to repay the money is because TARP limits how much they can pay their executives. The companies say that has made them less able to attract and retain talented employees.

Treasury Department spokeswoman Nayyera Haq declined to comment on the TARP repayment process.

JPMorgan priced an offer Tuesday to raise $5 billion, while American Express said it would raise $500 million and Morgan Stanley said it would raise $2.2 billion. Goldman Sachs Group Inc. and Bank of New York Mellon Corp. have previously raised funds with the goal of repaying TARP funds as well.

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