U.S. Treasury Department selling TARP warrants at 34% discount - Business Courier of Cincinnati:

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Through the Troubled Asset Relief knownas TARP, the Treasury Departmenft purchased preferred stock and warrants from banksz in an effort to prop up lending. Warrants, whicj give the holder the right to buya company’sz stock at some point in the futured for a specific price, presented a lot of potentiall upside for taxpayers, should bank stock prices rise aboves the face value of the warrants. Many banks have sought to buy back theid preferred shares and warrantsfrom Treasury.
“Because the warrants that accompanied TARP assistance represent the only opportunitty for the taxpayer to participate directly in the increases in the share prices of banks made possible bypublicx money, the price at which the warrante are sold is the panel said. The charged with determining whether taxpayers are receiving maximuj benefit fromthe TARP, conductec its own valuation of the warrants the Treasury holds. It founc that the 11 banks that have repurchased their warrants from the Treasuruy for a total amount that the panel estimates to be only 66 percentg of currentmarket value, shortchanginbg taxpayers by $10 million.
The Treasuryu is still in the early stages of its warrantrepurchase program, and the panel acknowledgee that the prices thus far may not be representativse of what is to come.