Flagstar Bancorp (FBC) rose in pre-market trading, after getting preliminary approval to participate in the U.S. Treasury's Capital Purchase Program.
The stock was up 10 cents just after 9:00 am ET, climbing to 81 cents. If pre-market gains hold, the stock will open at its highest level in a week and a half.
Wednesday, Flagstar Bancorp announced that it has received preliminary approval from the U.S. Department of the Treasury of its application to participate in Treasury's capital purchase program. Under the capital purchase program, Flagstar is eligible to sell to Treasury up to $266 million of newly issued Flagstar preferred stock, which will carry a 5% coupon for five years, and 9% thereafter. In addition, Treasury will receive warrants to purchase shares of Flagstar common stock in accordance with the terms of the Capital Purchase Program. These warrants will expire in 10 years.
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