01 Sep 2009
Sept. 1 (Bloomberg) -- Bank of America Corp. is offering to repay part of the $20 billion in U.S. government aid related to the bank's acquisition of Merrill Lynch & Co., the Wall Street Journal said, citing unidentified people familiar with the plan.Bank of America is also seeking to end a loss-sharing arrangement with the government on Merrill Lynch assets, the newspaper said. The Treasury Department and Federal Reserve have asked Bank of America to pay between $300 million and $500 million to end the arrangement, the Journal reported.
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. have already repaid the government, removing them from restrictions on how they pay workers. According to the Journal, Bank of America isn't offering to repay all the $45 billion it received under the Troubled Asset Relief Program.
A partial payment by the bank would mean it's no longer considered an exceptional aid recipient, a status that attracts scrutiny from Congress and regulators, the newspaper said. The bank is considering the payment proposed by the Treasury and the Federal Reserve in relation to the Merrill Lynch assets, according to the Journal.
Scott Silvestri, a spokesman for Bank of America, declined to immediately comment.
In January, the U.S. government agreed to guarantee $118 billion of Bank of America's assets to help the lender absorb Merrill Lynch and prevent the financial crisis from deepening. Under the agreement, Bank of America would absorb the first $10 billion of losses in the pool of assets, and the government would be liable for 90 percent of any additional losses.
Bank of America is also waiting for Kenneth Feinberg, U.S. President Barack Obama's "special master" on executive pay, to approve the company's 2009 pay package, the newspaper said. The compensation plan features so-called phantom stock units, which can't be converted to shares for a defined period of time, the Journal said, citing people familiar with the matter.
