The Treasury, FRB and FDIC have released a joint update on the status of the Public Private Investment Program (“PPIP”).  For a further discussion of the PPIP, please see the March 24, 2009 Alert.  As part of the update, the Treasury announced nine asset managers for the Legacy Securities Program (the “Program”):

• AllianceBernstein, LP and its sub-advisors, Greenfield 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, LP.;
• The TCW Group, Inc.; and
• Wellington Management Company, LLP.

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The Treasury, Federal Reserve Board and FDIC released a joint update on the Public Private Investment Program (”PPIP”).  Please find the entire release here (including the conflict of interest rules, FAQs, and letter of intent and term sheet):  http://www.financialstability.gov/latest/tg_07082009.html.  The key development in this update is the announcement of nine asset managers for the Legacy Securities Program (the “LSP”):

• AllianceBernstein, LP and its sub-advisors Greenfield 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, LP.;
• The TCW Group, Inc.; and
• Wellington Management Company, LLP.

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This is an updated version of the summary of financial crisis related programs first compiled on March 8. In the past month the Treasury produced further guidance on the programs through which it will purchase toxic assets in partnership with private investors. The following are the programs discussed in this summary. For more information click here.

The Treasury Department has released further guidance with respect to the PPIP Legacy Securities Program, as set forth in a press release today (http://www.treas.gov/press/releases/tg82.htm). Treasury has extended the deadline for Fund Manager applications to April 24, 2009, and has made a few clarifications to (a) the interaction between TALF and the PPIP, (b) proposals to encourage participation by small, minority-, women- and veteran-owned businesses, and (c) the role of Treasury debt financing. I also note that the additional FAQ document, which is hyperlinked into the Press Release, contains the following further comment as to PPIP warrants:

What are the terms of the Treasury warrants in a Legacy Securities PPIF?
The terms and amounts of warrants will be determined in part based on the amount of Treasury Debt Financing taken and will be evaluated on a case-by-case basis.

This week, the U.S. Treasury announced the much-anticipated details of the Public Private Investment Program (”PPIP”) that was introduced in summary form by Treasury Secretary Timothy Geithner last month.1 The program, which is part of the Obama Administration’s broader “Financial Stability Plan,” focuses on the purchase of what were described as “troubled assets” under the Troubled Assets Relief Program (”TARP”), part of the Emergency Economic Stabilization Act of 2008 (”EESA”) enacted last October. Although the TARP was originally proposed as a purchase program for troubled loans and mortgage-backed securities, the Bush Administration applied the first portion of the TARP proceeds toward direct capital infusions into banking institutions. The objectives of the PPIP are much closer to the original objectives of the TARP: to thaw the nation’s credit markets by moving legacy assets off the balance sheets of financial institutions so those financial institutions can expand their lending activities. For more information click here.