Political India: Engaging America

From The Hindu

General Motors has fully repaid its debt under the Troubled Asset Relief Programme, the Department of the Treasury announced on Thursday.

According to a statement GM paid the outstanding amount of $4.7 billion of the total $6.7 billion in debt that it owed to Treasury. The Treasury added that the repayment came five years ahead of the loan maturity date and “ahead of the accelerated repayment schedule the company announced last year.”

With this repayment the total TARP repayments now stand at $186 billion, which was “well ahead of last fall's repayment projections for 2010,” the Treasury said, and at this point less than $200 billion in TARP disbursements remain outstanding.

On the occasion Treasury Secretary Tim Geithner said, “We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability.” He added that such continued progress was a positive sign for the United States government’s auto investments, as not only were –funds recovered for the taxpayer but countless jobs had also been saved and a vital industry successfully stabilised.

The remaining Treasury stake in GM consists of $2.1 billion in preferred stock and 60.8 percent of the common equity after this repayment, the Treasury noted.

In recent weeks the Department of the Treasury said it had received full repayment on its TARP investments in the Hartford Financial Services Group and also repayments from PNC Financial Services and General Motors – a sum of over $4.4 billion. At that point the Treasury had said, “TARP repayments now total $181 billion, well ahead of last fall’s repayment projections for 2010.”

The Treasury had also then estimated that its programs aimed at stabilizing the banking system would earn a profit from dividends, interest, early repayments, and the sale of warrants. It struck a note of optimism for taxpayers saying that while the total bank investments of $245 billion in the financial year 2009 were initially projected to cost $76 billion, they were currently “projected to bring a profit.”

It noted that taxpayers had already received $14 billion through interest and dividends and “that number could be considerably higher by the end of this year.”

Labels: business, Department of Treasury, General Motors, TARP loans