NEW YORK (TheStreet) -- SunTrust (STI) and KeyCorp (KEY) both announced plans to raise capital to repay the Troubled Asset Relief Program (TARP) after the Federal Reserve announced that it has completed the second round of the stress tests.
KeyCorp has announced a public offering of $625 million of its common stock in connection with its plan to repurchase the $2.5 billion of the preferred stock. Morgan Stanley (MS) and JPMorgan (JPM) will act as bookrunners for the offering.
"Our goal has been to be patient in repaying TARP in order to reduce shareholder dilution," said KeyCorp CEO Henry Meyer. "We believe this is the appropriate time to put TARP repayment behind us and that repayment now is in the best interests of KeyCorp and our employees, customers and shareholders."
Key said in a statement that the board will consider raising the bank's quarterly stock dividend from a penny per share to three cents per share in the second quarter of 2011.Seperately, SunTrust said it will raise $1 billion in common stock and $1 billion senior debt offering to repurchase preferred stock issued under TARP. SunTrust Robinson Humphrey, Goldman Sachs (GS) and Morgan Stanley are acting as joint bookrunning managers of the offering. "SunTrust also looks forward to returning capital to its shareholders at the appropriate time," SunTrust CEO James M. Wells III added in the press release. --Written by Maria Woehr in New York.
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