State Street Corp. has repaid the full amount of the Department of the Treasury’s $2 billion investment in the company under the TARP Capital Purchase Program (CPP).

The company said it redeemed all of the outstanding shares of preferred stock issued to the Treasury for a total redemption price of $2 billion, which reflects the aggregate liquidation amount of the preferred stock and the accrued dividends since the most recent dividend payment date.

The effect of the redemption will be to reduce net income available to common stockholders by approximately $105 million in the second quarter. The company said this amount represents the difference between the amortized cost of the preferred stock and the redemption price.

State Street will also initiate discussions with the Treasury regarding its intent to repurchase the warrant issued to the Treasury in connection with the preferred investment. That warrant, initially exercisable for 5.6 million shares of State Street’s common stock, now represents an interest to purchase 28 million shares.

Due to State Street’s successful completion of a qualified public offering of common stock in May with gross proceeds of $2.3 billion in excess of the amount of the Treasury’s CPP investment, the number of shares underlying the warrant was reduced by one-half in accordance with the terms of the warrant.