Golden State Warrants Begin Trading

Golden State Bancorp will offer Wall Street today what analysts said is the best chance yet to invest in the long-standing legal claims of dozens of thrifts against the U.S. government. The Glendale-based thrift will distribute to shareholders at the end of the month warrants giving holders rights to 85% of the net after-tax proceeds of its breach-of-contract lawsuit against the government. The securities, dubbed “litigation tracking warrants,” begin trading on a “when-issued” basis, in advance of actual distribution. Analysts said the market value of the warrants will reflect the amount of damages investors think the thrift will collect, adjusted for the time value of money, because any payout is probably years away. Estimates of damage payments range from about $5 to $12 per warrant. The legal claims of Golden State and dozens of other thrifts concern the government’s promise to let them count part of the purchase prices of acquisitions as capital.