As detailed in this Firm’s publication, dated March 25, 2009 and entitled “United States Treasury Department Releases Details of the Public-Private Investment Program,” the Public-Private Investment Program (PPIP Program) created by the Federal Government consists primarily of the Legacy Loan Program and the Legacy Securities Program.1
- In a joint statement issued on July 8, 2009 (Joint Statement) by the Secretary of the United States Department of the Treasury (Treasury), Timothy Geithner, the Chairman of the Board of the Federal Reserve (Federal Reserve), Ben Bernanke, and the Chairman of the Federal Deposit Insurance Corporation (FDIC), Sheila Bair, it was announced that the Treasury would invest up to $30 billion in the Legacy Securities Program.2 Furthermore, the Joint Statement contained a list of eight (8) firms that were pre-approved to serve as initial “fund managers” under the Legacy Securities Program. According to the Joint Statement, these firms have up to twelve weeks from July 8, 2009 to raise at least $500 million in capital from private investors for the Legacy Securities Program.
- The Legacy Loans Program appears to be on hold. In the Joint Statement it was noted that, “The FDIC remains committed to building a successful Legacy Loans Program for open banks and will be prepared to offer it in the future as needed to cleanse bank balance sheets and bolster their ability to support the credit needs of the economy. In addition, the FDIC will continue to work on ways to increase the utilization of this program by open banks and investors.” Nevertheless, there have been no indications that the Legacy Loans Program will be launched any time soon.
- For a copy of the Joint Statement, visit http://www.financialstability.gov/latest/tg_07082009.html