Northern Trust plans $1.25 bil sale to repay TARP

Northern Trust Corp. plans to sell $1.25 billion in common stock and senior notes so that it can repurchase the stake sold to the U.S. Treasury.

Northern Trust intends to sell $750 million in a public offering of its common shares, and an additional $500 million in senior notes, the Chicago-based custody bank said today in a statement. Northern Trust also plans to buy back its warrants included in the U.S. stake, according to the statement.

Northern Trust received $1.6 billion from the U.S. Treasury last year in exchange for preferred shares and warrants under the Troubled Asset Relief Program. Each quarter, the company pays a portion of a 5 percent annual dividend on the preferred shares. The company paid $23 million under the program in the first quarter.

Northern Trust company said in February it would return its TARP money "as soon as prudently possible" after being criticized by U.S. lawmakers for spending money entertaining clients and employees at a professional golf tournament it sponsored near Los Angeles.