Two recipients of funds from the Troubled Asset Relief Program were selling corporate bonds Wednesday in an effort to help them disentangle themselves from the government's influence.
American Express Co. and J.P. Morgan Chase & Co. were expected to sell at least $500 million each of corporate bonds not guaranteed by the Federal Deposit Insurance Corp.
The government has said that banks that can raise funds without FDIC guarantees and meet stress-test capital requirements will be allowed to pay back Tarp funds.
Stress tests have found that neither needed to raise capital to weather adverse economic conditions.
In its prospectus, Amex said it could direct some of the proceeds from the debt sale to paying back the government.
JPMorgan Chase in April raised $3 billion in 10-year notes that were not guaranteed, and Goldman Sachs Group has already sold $4 billion of nonguaranteed bonds this year. Bank of New York Mellon Corp. sold $1.5 billion of bonds last week, and Morgan Stanley sold $4 billion after being directed by the government to bolster its capital.
BB&T Corp. said Wednesday that it had applied to repay the $3.1 billion it got from Tarp.
The Winston-Salem, N.C., company established a capital plan with a $1.5 billion stock offering announced this week, $800 million of debt raised earlier and $725 million of savings generated from cutting its dividend.
The plan leaves the company not only with enough cash to repay the government but also with a better capital structure, said Christopher Henson, BB&T's chief operating officer.
It was unclear how long it would take regulators to approve the plan and the repayment application, but with the fresh capital and even after repayment, BB&T would end up with a Tier 1 common capital ratio "north of 8%," Henson said, which is double the minimum requirement established by the stress test.
