GM to Repay $6.7bn Loan Early but 46 Companies Behind on TARP Payments

November 16, 2009

(ChattahBox) — The massive rescue of the financial system, has been a mixed bag so far. Officials poured about $700 billion into investments in scores of companies, and so far about 17 percent of Troubled Asset Relief Program (TARP) loans issued since the program began a year ago have been repaid, according to a 252-page report released in October by TARP’s Special Inspector General Neil Barofsky. According to the Washington Post, 46 companies have missed dividend payments to the government by the end of September.
Analysts expect that many bailed-out firms will fail or struggle to repay the government in the coming months. United Commercial Bank of San Francisco, which became the first to fail at the beginning of November, cost taxpayers $299 million. A bigger hit to come soon is, CIT Group, one of the nation’s leading funders of small and medium-sized businesses, who is in bankruptcy court after receiving $2.3 billion from the Troubled Asset Relief Program. By filing for bankruptcy, creditors will end up owning the CIT, while common and preferred shareholders, including the US government, will be wiped out by the plan. Meanwhile insiders now say General Motors Co. is expecting to fully repay the $6.7 billion in U.S. government loans on its books by 2011, four years earlier than required, because its sales have exceeded expectations and its costs have been lower than planned.   Of the TARP program, former assistant Treasury secretary Phillip Swagel said that “the taxpayers certainly have gotten a very strong return on many of those investments, but it’s inevitable that when you invest in hundreds of institutions, some of them are going to go bad.”


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2 Responses to “GM to Repay $6.7bn Loan Early but 46 Companies Behind on TARP Payments”

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