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Alert: Treasury Provides Details On Legacy Securities PPIP and Names Asset Managers
07.16.09
On July 8, 2009, the Treasury announced further details regarding its Legacy Securities Public-Private Investment Program. This program is aimed at relieving financial institutions of illiquid assets that continue to hamper the flow of credit markets.
Under this program, the Treasury will invest up to $30 billion of equity and debt side-by-side with private investors through public-private investment partnerships (PPIPs). The PPIPs will be managed by select asset managers and will invest in eligible assets. The eligible assets will initially include certain commercial mortgage-backed securities and non-agency residential mortgage backed-securities issued prior to 2009.
With a pool of over 100 applicants, the Treasury named the following nine firms as initial asset managers of the PPIPs:
· Alliance Bernstein, LP and its subadvisors Greenfield
Partners, LLC and Rialto Capital Management, LLC
Partners, LLC and Rialto Capital Management, LLC
· Angelo, Gordon & Co., L.P. and GE Capital Real Estate
· Blackrock, Inc.
· Invesco Ltd.
· Marathon Asset Management, L.P.
· Oaktree Capital Management, L.P.
· RLJ Western Asset Management, L.P.
· The TCW Group, Inc.
· Wellington Management Company, LLP
Each firm will have up to 12 weeks to raise at least $500 million from private investors for the PPIP. The Treasury will match the equity from private investors and also provide debt financing up to 100% of the total equity of the PPIP. Subject to total leverage limits, the PPIPs may also obtain private debt financing through the Term Asset-Backed Securities Loan Facility (TALF) for assets eligible for that program.
For a complete term sheet relating to the legacy securities PPIPs, please visit http://www.financialstability.gov/docs/S-PPIP_LOI_Term-Sheets.pdf.
This Client Alert is prepared for the general information of our clients and other interested persons. This Client Alert is not, and is not intended to be, comprehensive in nature. Due to the general nature of its content, this Client Alert is not and should not be regarded as legal advice.
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