UPDATE 2-Northern Trust plans offering to repay TARP

* Discussed repayment of TARP funds with regulators

* Says Capital raised will help repay $1.5 billion

* Shares fall 3 pct after-hours
(Adds background on companies that have accepted TARP funds,
other details)

NEW YORK, April 27 (Reuters) - Northern Trust (NTRS.O) has
launched a $750 million stock offering and plans to issue $500
million in senior notes to help it repay U.S. taxpayer funds.

The bank and asset manager, which caters to institutional
investors and the wealthy, received $1.5 billion last fall
through the government's Troubled Asset Relief Program. The
company had said in February it wanted to repay that money as
soon as possible.

Northern Trust has discussed with regulators repaying the
funds, the bank said in a statement on Monday. It will use all
the capital raised, as well as additional resources, to repay
the government's preferred stock investments and the warrant it
sold to the Treasury as part of the program, it said.

Financial institutions that were pressed to take TARP money
last year, or that chose to, are now looking to pay it back
because of the strings tied to the funds, including pay
limitations for senior executives.

American Express (AXP.N), which received $3.4 billion in
TARP funds, said last week it plans to repay the money as soon
as regulators allow.

Two weeks ago, Goldman Sachs Group (GS.N) issued $5 billion
in shares to help repay its $10 billion of TARP money, while
JPMorgan Chase & Co (JPM.N) said it has the resources to repay
the government $25 billion in TARP immediately.

A handful of smaller banks, including Minnesota lender TCF
Financial Corp (TCB.N), have also repaid the government funds.

U.S. Treasury department data shows more than 500 companies
have taken funds from the $700 billion program.

Northern Trust reported lower-than-expected fourth-quarter
earnings last week as falling stock markets slashed money
management fees.

Shares of the Chicago-based company fell about 3 percent in
after-hours trading on Monday to $53.25 from $55.01.

The company's shares have climbed 9 percent since the start
of the year but the shares are down 28 percent over the past 12
months.
(Reporting by Elinor Comlay, editing by Leslie Gevirtz and
Matthew Lewis)