Was the Goldman TARP Payback Below Market Value?

Back in October, the Treasury purchased $10 Billion in Warrants from Goldman Sachs as part of TARP. Yesterday, Lloyd Blankfein made the claim that in repaying that $10 Billion amount with $11.418 Billion, it works out to a 23% annualized return for U.S. taxpayers. Per Marketwatch:

"This return is reflective of the government's assistance, which benefited the financial system, our firm and our shareholders," Goldman Chief Executive Lloyd Blankfein said in a statement. "We are grateful for the government efforts."

And it does. If you ignore such "small" things like the $13.9 Billion provided to Goldman via AIG and all those FDIC guarantees. As the WSJ points out:

FDIC guarantees helped the company secure financing at a cheaper rate since Goldman was essentially using the government’s credit card. This helped boost the company’s earnings for the three quarters it used the program. And Goldman didn’t dabble. It was the sixth biggest participant in the program by volume, according to Dealogic.

Ignoring ALL of this... lets see how our (i.e. taxpayer) 14.2% NON-annualized investment performance compares to what we could have received as a normal market participant.

Yes, I understand that we, the taxpayer, got in at the preferred stock level (i.e. more senior than equities), thus the underperformance relative to the returns seen in Goldman's common equity (though not sure about 60% less).

But how is 20% less than the return on a ~10 year Goldman Sachs corporate bond "fair value"?

Source: Yahoo, Barclays