JPMorgan Seeks Freedom from TARP Trap

Updated from 11:11 a.m. EDT

JPMorgan Chase's (JPM Quote) Chairman and CEO Jamie Dimon will be glad to be "free and clear" of restrictions tied to federal bailout money once its pays off the government's $25 billion investment later this month.

The New York financial institution launched a common stock offering on Tuesday to raise $5 billion, intended to satisfy requirements set by the Federal Reserve for companies hoping to repay capital investments made through the Troubled Asset Relief Program.

The company announced late Monday that it would offer stock in the open markets. Dimon seemed slightly exasperated on the company's conference call late Monday to discuss the equity offering and TARP repayment.

"We believe we met all the terms to get out of TARP. If we don't get out of TARP, we would be very surprised," he said. "We don't think we should be surprised."

JPMorgan priced 142 million shares of common stock at $35.25 a share on Tuesday, a 2.4% discount to Monday's closing price. Underwriters have the option to purchase an additional 21.3 million shares of common stock to cover overallotments, it added.

The company had previously raised $7.5 billion in non-guaranteed debt to satisfy another Fed requirement that banks that repay TARP must be able to access the long-term debt markets without federal guarantees.

JPMorgan Chase has not received formal approval to repay the funds, but expects to do so by the end of the month, it says.

Once the company repays the capital (which does not include warrants that the government holds on JPMorgan Chase) Dimon said the firm will be "free and clear, like a real American free citizen, corporate citizen, like we were in the past." He was referring to government restrictions on paying dividends, share repurchases and other limits the program placed on the banks.