UPDATE 1-US Treasury auctions Boston Private warrants

Mon Jan 31, 2011 8:55am EST

(Adds details from SEC registration statement, background)

WASHINGTON Jan 31 (Reuters) - The U.S. Treasury said on Monday it will auction 2.89 million stock warrants in Boston Private Financial Holdings Inc (BPFH.O) at a minimum bid price of $1.40 each.

The Dutch-style auction for the warrants, received in exchange for bailout funds under the Troubled Asset Relief Program, will start on Tuesday at 8 a.m. (1300 GMT) and end at 6:30 p.m. Bids above the minimum price may be made in 5-cent increments, the Treasury said.

At the minimum bid price, gross proceeds before expenses from the sale would be just over $4 million. Each bank that took bailout money from TARP's Capital Purchase Program, begun by the Bush administration in 2008, agreed to provide Treasury with stock warrants at zero cost to allow taxpayers to share in the financial sector's recovery.

The Treasury is in the midst of planning auctions for several mid-size banking institutions.

The Boston Private warrants expire on Nov. 21, 2018, and allow the holder to purchase one share of Boston Private's common stock at a strike price of $8 per share, according to a registration statement filed with the Securities and Exchange Commission. The bank holding company's stock price closed on Friday at $6.72 a share.

Deutsche Bank Securities is the sole book-running manager for the auction. (Reporting by David Lawder, Editing by Neil Stempleman)

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