Location: Washington, DC
Author: RiskCenter Staff
Date: Monday, November 3, 2008
The Treasury Department issued additional documents for publicly traded financial institutions applying for the capital purchase program authorized by the Emergency Economic Stabilization Act. Documents include:
* Securities Purchase Agreement: This document describes the terms of the financial institution's agreement to issue shares and fulfill other requirements in exchange for Treasury's investment.
* Form of Letter Agreement: This contractual agreement describes the firm-specific information necessary to implement the securities purchase agreement and represents the financial institution's commitment to the terms of the Securities Purchase Agreement.
* Certificate of Designations: This document creates the preferred shares.
* Form of Warrant – Stockholder Approval Not Required: This document describes the terms of the warrants Treasury receives when stockholder approval is not required.
* Form of Warrant – Stockholder Approval Required: This document describes the terms of the warrants Treasury receives when stockholder approval is required.
* Term Sheet
* SEC, FASB Letter on Warrant Accounting
This program is designed to attract broad participation by healthy institutions, to stabilize the financial system and increase lending for the benefit of the U.S. economy and the American people.
After a financial institution is granted preliminary approval, the institution must complete and submit the securities purchase agreement, letter agreement, certificate of designations and warrant. Financial institutions that are granted preliminary approval will receive a letter from the Treasury Department with instructions regarding filing the documents and completing the process.
Once the investment agreements are complete and the investment is authorized, within two business days Treasury will publicly disclose the name and capital purchase amount for the financial institution. The information will be posted at http://www.treasury.gov/initiatives/eesa/ and updated daily at 4:30 p.m. (EDT) as needed.
All publicly traded eligible institutions wishing to participate should submit their applications no later than 5:00 p.m. (EDT), November 14, 2008.
Treasury will post an application form and term sheet for privately held eligible institutions at a later date and establish a reasonable deadline for private institutions to apply.
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