US Taxpayers Make 23 Percent Return
The Goldman Sachs Group, Inc. (NYSE: GS) announced today that it has
redeemed the warrants the U.S. government received in connection with
its investment in the firm through the TARP’s Capital Purchase Program
at $1.1 billion, the full value the U.S. Treasury Department has
determined.
While there are a number of ways to value the warrants, including
through a public auction, we believe that in the context of the
extraordinary actions taken by the government to help stabilize the
financial system, this valuation of the warrants represents full and
fair value.
In June, Goldman Sachs repaid the U.S. Treasury’s investment of $10
billion, and during the eight months of the investment, the firm paid
$318 million in preferred dividends. We are pleased that the payment of
the dividends and the redemption of the warrants, which total $1.418
billion, represent an annualized return of 23 percent for US taxpayers.
“This return is reflective of the government’s assistance, which
benefitted the financial system, our firm and our shareholders,” said
Lloyd C. Blankfein, Chairman and CEO. “We are grateful for the
government efforts and are pleased that this additional money can be
used by the government to revitalize the economy, a priority in which we
all have a common stake.”
He added, “Because Goldman Sachs advises companies with their growth
plans and raises capital to support that growth, the best and most
sustainable operating environment for us is one where consumer and
business confidence and economic growth flourish. We are committed to
allocating capital and providing liquidity to our clients to help
stimulate growth and job creation.”
The Goldman Sachs Group, Inc. is a leading global financial services
firm providing investment banking, securities and investment management
services to a substantial and diversified client base that includes
corporations, financial institutions, governments and high-net-worth
individuals. Founded in 1869, the firm is headquartered in New York and
maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major
financial centers around the world.