BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE:STT), today announced that it has repaid
the full amount of the US Department of the Treasury's$2 billion
investment in the company under the TARP Capital Purchase Program (CPP).
The Company redeemed all of the outstanding shares of preferred stock
issued to the U.S. Treasury for a total redemption price of
$2,000,555,556, which reflects the aggregate liquidation amount of the
preferred stock and the accrued dividends since the most recent dividend
payment date. The effect of the redemption will be to reduce net income
available to common stockholders by approximately $105 million in the
second quarter of 2009. This amount represents the difference between
the amortized cost of the preferred stock and the redemption price.
State Street will also initiate discussions with the US Treasury
regarding its intent to repurchase the warrant issued to the US Treasury
in connection with the preferred investment. That warrant, initially
exercisable for 5,576,208 shares of State Street's common stock, now
represents an interest to purchase 2,788,104 shares. Due to State
Street's successful completion of a qualified public offering of common
stock in May 2009 with gross proceeds ($2.3 billion) in excess of the
amount of the US Treasury's CPP investment, the number of shares
underlying the warrant was reduced by one-half in accordance with the
terms of the warrant.
State Street Corporation (NYSE: STT) is the world's leading provider of
financial services to institutional investors including investment
servicing, investment management and investment research and trading.
With $11.337 trillion in assets under custody and $1.395 trillion in
assets under management at March 31, 2009, State Street operates in 27
countries and more than 100 geographic markets and employs 27,500
worldwide.
FORWARD-LOOKING STATEMENTS
This news announcement contains forward-looking statements as defined by
United States securities laws, including statements about our goals and
expectations regarding our business, financial condition, results of
operations and strategies, the financial and market outlook,
governmental and regulatory initiatives and developments, and the
business environment. These statements are not guarantees of future
performance, are inherently uncertain, are based on current assumptions
that are difficult to predict and involve a number of risks and
uncertainties. Therefore, actual outcomes and results may differ
materially from what is expressed in those statements, and those
statements should not be relied upon as representing our expectations or
beliefs as of any date subsequent to the date of this release.
Important factors that may affect future results and outcomes include,
but are not limited to:
-- global financial market disruptions and the current worldwide economic
recession, and monetary and other governmental actions designed to
address such disruptions and recession in the U.S. and internationally;
-- increases in the potential volatility of our net interest revenue,
changes in the composition of the assets on our consolidated balance
sheet and the possibility that we may be required to change the manner
in which we fund those assets, all as a result of the May 15, 2009
consolidation for financial reporting purposes of the asset-backed
commercial paper conduits that we administer;
-- the financial strength and continuing viability of the counterparties
with which we or our clients do business and with which we have
investment or financial exposure;
-- the liquidity of the U.S. and international securities markets,
particularly the markets for fixed income securities, and the liquidity
requirements of our customers;
-- the credit quality and credit agency ratings of the securities in our
investment securities portfolio, a deterioration or downgrade of which
could lead to other-than-temporary impairment of the respective
securities and the recognition of an impairment loss;
-- the maintenance of credit agency ratings for our debt obligations as
well as the level of credibility of credit agency ratings;
-- the possibility of our customers incurring substantial losses in
investment pools where we act as agent, and the possibility of further
general reductions in the valuation of assets;
-- our ability to attract deposits and other low-cost, short-term funding;
-- potential changes to the competitive environment, including changes due
to the effects of consolidation, extensive and changing government
regulation and perceptions of State Street as a suitable service
provider or counterparty;
-- the level and volatility of interest rates and the performance and
volatility of securities, credit, currency and other markets in the U.S.
and internationally;
-- our ability to measure the fair value of the investment securities on
our consolidated balance sheet;
-- the results of litigation, government investigations and similar
disputes and, in particular, the effect of current or potential
proceedings concerning State Street Global Advisors', or SSgA's, active
fixed-income strategies and other investment products, and the enactment
of legislation and changes in regulation and enforcement that impact us
and our customers;
-- adverse publicity or other reputational harm;
-- our ability to pursue acquisitions, strategic alliances and divestures,
finance future business acquisitions and obtain regulatory approvals and
consents for acquisitions;
-- the performance and demand for the products and services we offer,
including the level and timing of withdrawals from our collective
investment products;
-- our ability to continue to grow revenue, attract highly skilled people,
control expenses and attract the capital necessary to achieve our
business goals and comply with regulatory requirements;
-- our ability to control operating risks, information technology systems
risks and outsourcing risks, the possibility of errors in the
quantitative models we use to manage our business and the possibility
that our controls will fail or be circumvented;
-- the potential for new products and services to impose additional costs
on us and expose us to increased operational risk, and our ability to
protect our intellectual property rights;
-- changes in government regulation or new legislation, which may increase
our costs, expose us to risk related to compliance or impact our
customers;
-- changes in accounting standards and practices; and
-- changes in tax legislation and in the interpretation of existing tax
laws by U.S. and non-U.S. tax authorities that impact the amount of
taxes due.
Other important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements are
set forth in our 2008 Annual Report on Form 10-K and our subsequent SEC
filings, including our Current Report on Form 8-K filed on May 18, 2009.
We encourage investors to read these filings, particularly the sections
on Risk Factors, for additional information with respect to any
forward-looking statements and prior to making any investment decision.
The forward-looking statements contained in this press release speak
only as of the date hereof, June 17, 2009, and we do not undertake
efforts to revise those forward-looking statements to reflect events
after this date.
Source: State Street Corporation
Contact: State Street Corporation
Edward J. Resch, +1 617-664-1110
or
Investors:
Kelley MacDonald, +1 617-664-3477
or
Media:
Carolyn Cichon, +1 617-664-8672