Flagstar Bancorp in Troy, Mich., is paying $371 million to put behind it the vestiges of its dealings with the Troubled Asset Relief Program.
The $13.7 billion-asset company said Thursday that it has received regulatory approval to buy back the series C preferred stock that it had issued to the Treasury Department in 2009 and that the government sold to investors in 2013. The shares had a face value of $267 million, but Flagstar also owes the securities holders more than $100 million in accrued and unpaid dividends, the company said in a Securities and Exchange Commission filing Wednesday.
Flagstar plans to finance the buyback, which is set to occur July 29, with proceeds from senior debt securities and from internally generated sources, including a $200 million dividend from its Flagstar Bank subsidiary, the filing said.
Also on Wednesday, Flagstar provided details on the senior debt offering. The company will seek by July 11 to sell $250 million of notes bearing a 6.125% interest rate that are due in 2021, it said in a news release. Flagstar will use the proceeds to fund the buyback of the Tarp-related shares and for general corporate purposes.