State Street Corp. repays $2 billion receives as part of government investment program

State Street repays $2B in TARP funds

NEW YORK — State Street Corp. says it was among the banks to repay $2 billion it received last fall as part of the government’s $700 billion bank investment program.

Boston-based State Street received the money as part of the Treasury Department’s Troubled Asset Relief Program, aimed at reviving the stagnant credit and lending markets.

The government provided banks with capital in exchange for preferred stock and warrants to purchase common shares. The preferred stock carried an interest rate of 5 percent. The investment also included certain restrictions, such as caps on executive compensation that left some banks pushing to repay the loan as quickly as possible.

Wednesday’s repayment did not include the repurchase of the warrants. A State Street spokeswoman said the bank, which specializes in serving institutional investors and wealthy customers, plans to start talks with the Treasury Department regarding repurchase of the warrants.

Last week, the government granted 10 of the country’s largest banks approval to pay back a total of $68 billion in TARP funds. Wednesday was the first day those banks were eligible to repay the loans, and all 10 did so.

Shares of State Street rose 24 cents to close at $45.25 in Wednesday trading.