On March 23, 2009, the U.S. Treasury released much-anticipated details of its Public-Private Investment Program, aimed at improving the liquidity and pricing of troubled real estate loans and mortgage-backed securities.
Two separate programs were unveiled, differing greatly in their timing, the assets targeted, and the range of asset managers eligible to participate. Each of the programs relies on “public-private investment funds” (“PPIFs”) to leverage private capital with substantial government contributions. In each of the programs the government will provide matching equity capital for the private investors, and either loans to the public-private vehicles or guarantees of their debt.
Today, the Federal Deposit Insurance Corporation (“FDIC”) released additional program details for public comment, and hosted a call for banks to discuss questions about the Legacy Loans Program. Information about the FDIC release and call is included in the memorandum where appropriate.
The salient features of the programs are summarized in the memorandum below. Note, however, that significant details of the programs are either unclear or yet to be announced, as highlighted in the memorandum.
