Factbox: U.S. Treasury plans GM stock sale as TARP winds down

Wed Dec 19, 2012 3:19pm EST

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(Reuters) - The U.S. Treasury said on Wednesday it planned to sell off its remaining shares in General Motors Co (GM.N) within the next 12-15 months, closing the book on a $50 billion bailout from the government's Troubled Asset Relief Program.

The $700 billion TARP program was approved by Congress in 2008 at the height of the financial crisis. The plan to unwind the government's position in GM is part of a broader effort to shut the bailout fund.

Following is a look at the current status of the program, which over its history has disbursed $417.8 billion in funds. In its latest report to Congress, Treasury estimated the total lifetime cost of TARP at $59.7 billion:

CAPITAL PURCHASE PROGRAM

This program was the Treasury's main bank bailout facility, with disbursements of about $205 billion spread among 707 banks. As of November 30, the Treasury said it had an outstanding investment of $7.7 billion.

On Tuesday, it said it planned to auction off its preferred shares or subordinated debt in about two-thirds of the 218 banks remaining in the program, and said it expected the majority of the remaining banks to repay Treasury at par.

As of September 30, it expected this program to provide a positive return of about $15 billion.

OTHER BANK PROGRAMS

The Treasury also extended support to Citigroup and Bank of America under the Targeted Investment Program, and to Citigroup under the Asset Guarantee Program. It has since closed out those investments with proceeds of about $7.9 billion.

A much smaller program supporting community development lenders, in which Treasury still has an outstanding investment of about $540 million, is expected to cost taxpayers $150 million.

PUBLIC-PRIVATE INVESTMENT PROGRAM

This program was designed to support the market for mortgage-backed securities. Disbursements totaled $18.6 billion, but as of November 30 the government's outstanding investment was down to about $5.5 billion. It expects to earn about $2.4 billion over the lifetime of the program.

OTHER CREDIT MARKET PROGRAMS

Under the Term Asset Backed Securities Loan Facility, the Treasury agreed to provide credit protection to the Federal Reserve to cover lending designed to jump start the market for asset-backed securities. The Treasury committed $1.4 billion under the program and its outstanding investment as of November 30 stood at $100 million. It expects to earn about $520 million on this program.

The Treasury also had a program to support small business lending that had disbursed $370 million. That program is now closed with no gain or loss to taxpayers.

AMERICAN INTERNATIONAL GROUP

The Treasury pumped nearly $70 billion into insurer AIG as part of a bailout with the Federal Reserve that totaled $182 billion.

The Treasury sold off its remaining AIG shares earlier this month and said the combined bailout had a positive return of $22.7 billion. That figure includes proceeds from AIG shares Treasury held outside of the TARP program.

AUTOMOTIVE INDUSTRY SUPPORT

The Automotive Industry Financing Program, which disbursed funds to General Motors, Chrysler and Ally Financial, faces the biggest shortfall. This facility has disbursed nearly $80 billion, including the $50 billion for GM. At the end of November, Treasury still had an investment of $37.2 billion outstanding.

As part of its effort to unwind its position in GM, the Treasury on Wednesday said it would sell 200 million shares of common stock back to the company at $27.50 a share. If it were to sell its remaining 300.1 million shares at the same price, it would face a loss of more than $12 billion on the automaker's bailout.

In its last report to Congress, the Treasury said it expected to lose about $24.3 billion on its auto bailout programs overall.

HOUSING SUPPORT

The Treasury also set aside about $45 billion for programs to support the housing sector, but only a little more than $6 billion has been disbursed. The Treasury does not anticipate recovering any of the funds set aside.

(Compiled by Timothy Ahmann; Editing by Leslie Gevirtz)

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