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Saturday, March 19, 2011 - 3:50am

SunTrust to Repay Nearly $5M in Federal Aid

Updated: 3 years ago.
Atlanta-based SunTrust Banks plans to repay nearly $5 billion in federal aid it received during the financial bailout. SunTrust began selling $1 billion in new stock and will soon issue $1 billion in new debt to fund the repayment plan. (Photo Courtesy of Elvert Barnes via ipernity.

Atlanta-based SunTrust Banks outlined Friday its plan to repay nearly $5 billion in federal aid it received during the financial bailout.

The Atlanta Journal-Constitution reported SunTrust began selling $1 billion in new stock and will soon issue $1 billion in new debt to fund the repayment plan.

SunTrust will be the largest U.S. bank yet to pay off the taxpayer funds it received under the Troubled Asset Relief Program.

Chris Marinac, bank analyst with FIG Partners in Atlanta, said SunTrust got criticism for not following the repayment path of other big banks and issuing shares at steep discounts during the worst of the financial crisis.

Executives said they didn't want to dilute shareholders’ holdings and reduce the bank's earning per share potential.