Wells Fargo Sells 426M Shares to Help Repay TARP

SAN FRANCISCO-Wells Fargo on Tuesday sold 426 million shares at $25 apiece, raising $10.65 billion to help it pay back $25 billion in government funds it used to right its ship last year. Citigroup is expected to conduct a similar sale later this week.

Wells Fargo sold the US Treasury $25 billion of series D preferred stock in October 2008. Under terms of the authorization from the Treasury and banking regulators to repay the investment, Wells Fargo agreed to not only sell common stock but also to increase equity by $1.5 billion through asset sales.

The asset sales must be approved by the Board of Governors of the Federal Reserve. To the extent those asset sales are not completed by the end of 2010, the company agreed it would raise a commensurate amount of common equity, the company said.