Should foreign companies get TARP funds?

Why not? Everyone else is getting something.

Aegon, a Dutch company, is trying the same maneuver that Genworth Financial and Hartford, two American companies, are trying — it’s buying a small depositary institution. This will give it access to the U.S. Troubled Asset Relief Program (TARP). Forget about foreclosures, the TARP is now about recapitalizing financial institutions. But, does that mean domestic and foreign institutions?

Aegon NV said it may buy a small U.S. thrift company to qualify for potentially more than $1 billion in U.S. government support, sending its shares down more than 8 percent.

“This is part of our strategy to ensure Aegon has the strongest capital position possible,” said Aegon spokesman Greg Tucker.

The range was between 1 percent and 3 percent of its $125 billion in U.S. assets, he said, and the application was for the so-called Troubled Asset Relief Program (TARP), which the U.S. government has used to help banks hit by the credit crisis.

In a statement issued later on Tuesday, Aegon said while it may be eligible for TARP funding, it had no need for additional capital beyond the 3 billion euros ($3.8 billion) injection agreed with the Dutch government last month.

Aegon shares initially fell as much as 8.5 percent, but trimmed losses after a positive opening to Wall Street. The shares closed up 2 percent at 3.53 euros. The DJ European insurance index was up 0.7 percent.

“I think Aegon has bigger problems than we realize. They have invested precisely there where the problems are: the United States,” said asset manager Fred Huibers of Dutch Haags Effectenkantoor, which does not own Aegon shares.

Aegon, which owns U.S. life insurer Transamerica and gets three-quarters of its operating profit from the United States, may buy a thrift company — possibly Maryland-based Suburban Federal Savings Bank — to be eligible for the support, Tucker said.

Nice. Get in line because the gravy train is pulling into the station.

Aegon may buy thrift company, tap U.S. government funds – Reuters

Related posts
Barney Frank rips Hank Paulson’s bait and switch
Paulson is handing out free money like candy to a baby
Bailout Nation

1 Comment
  1. Susan Kishner says

    Thanks for posting the article, was certainly a great read!

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More