Washington Federal Warrants Bring in Millions

WASHINGTON (AP) - The Treasury Department has received $15.39 million from the sale of warrants it received from Washington Federal Inc. as part of the support it provided from the government's $700 billion bailout program.

The Treasury said Wednesday that it sold 1.71 million warrants in an auction that took place the previous day. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price.

The auction for the Seattle-based bank followed one held last week in which the government raised a record $1.54 billion from the sale of warrants received from Bank of America.

The Treasury said that the Washington Federal warrants brought an auction price of $9.15 per warrant, above the minimum bid of $5 per warrant set by Treasury.

Under the terms of the auction, the owner of the warrants will have the right to purchase Washington Federal stock at a price of $17.57. That would mean shares of Washington Federal would have to be above $26.72 for the warrants to be "in the money" or above
the price the holder paid for the warrant plus the amount he would pay for the stock.

At the height of the financial crisis, Washington Federal received $200 million in November 2008 from the government's $700 billion bailout fund, known as the Troubled Assets Relief Program.

Financial institutions have been eager to exit from the TARP program to escape various restrictions imposed on institutions receiving government support including limitations on executive compensation.

Washington Federal operates 150 offices in Washington, Oregon, Idaho, Utah, Nevada, Arizona, Texas and New Mexico.

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