Huntington (Nasdaq:HBAN) Raising $1.2 Billion to Pay Back TARP

Huntington Bancshares Inc. (Nasdaq:HBAN) released their plan to pay back TARP today, saying they'll raise $1.2 billion by selling stock and issuing debt.

The market hasn't responded well to the news, as shareholders had been looking for the bank not to have to raise so much capital to pay back the $1.4 billion it borrowed from the Troubled Asset Relief Program.

Huntington said they'll share $920 million in common stock and another $300 million in debt to reach their goal.

Responding to the announcement, Fitch said this after upgrading Huntington's credit from BBB to BBB+, "For most of 2010, core profitability has trended positively, including growth in pre-provision net revenues compared to 2009. Operating performance has also benefited from improved credit trends, which has reduced provisioning needs."

They added that their outlook on Huntington is stable, and cited their better performance as also a reason for the upgrade.

Erik Oja, a Standard & Poor's Equity Research analyst, while liking the coming removing the yoke of the government off of their neck, downgraded them from "Buy" to "Hold." That was based on the approximate 135 million of shares that will be issued to raise the capital, an increase of 19 percent.

Huntington was trading at $6.53, down $0.32, or 4.61 percent, as of 1:50 PM EST.