State Street to sell stock

The Boston-based custodial bank and asset manager said it will use proceeds from the securities sales to help repay a $2 billion infusion from the Troubled Asset Relief Program. It did not specify a size for the debt offering but said it would not be backed by the federal government, a requirement for paying back TARP.  Many banks want to repay TARP funds because of restrictions imposed by the government, including on executive pay, and because holding the funds is viewed as a sign of weakness.

State Street was among 19 large US banks to undergo government “stress tests” of their ability to handle a deep recession, and was among nine found not to need more capital.