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ARTICLE · 31 MARCH 2009

Treasury Unveils Public-Private Investment Program For Legacy Assets

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On March 23, the U.S. Treasury (UST), in conjunction with the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, unveiled the Obama administration's plan to purchase troubled or "legacy" assets that are currently clogging the balance sheets of U.S. financial institutions.

United StatesStrategy
Katten Muchin Rosenman LLP
Katten Muchin Rosenman LLP
David Dlugie
David Dlugie
Christine Fitzgerald
Christine Fitzgerald
Andrew Jagoda
Andrew Jagoda
Charles Lansden
Charles Lansden
Timothy Little
Timothy Little
Jeffrey Patt
Jeffrey Patt
Benzion Westreich
Benzion Westreich
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On March 23, the U.S. Treasury (UST), in conjunction with the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, unveiled the Obama administration's plan to purchase troubled or "legacy" assets that are currently clogging the balance sheets of U.S. financial institutions. The Public-Private Investment Program (PPIP) is expected to generate $500 billion of purchasing power (with the potential to expand to up to $1 trillion over time) to buy legacy assets by combining capital from private investors with $75 to $100 billion in UST-provided TARP equity, which will then be substantially leveraged with debt guaranteed by the FDIC and/or issued by the UST and the New York Federal Reserve Bank (NYFRB).

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