Client Alert

Public-Private Investment Program Announced

March 24, 2009

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Because of the rapidly changing conditions in the financial markets, we have established this special series of Client Alerts to advise you of the newest economic and legal developments and their wide-ranging business implications.

On March 23, 2009, the U.S. Department of Treasury and FDIC announced a program under which public-private investment funds could begin purchasing distressed assets from financial institutions. Two types of funds will be created.

 

  • Legacy Loan Funds will purchase loans or pools of loans from financial institutions. The funds will be financed by equivalent equity investments from private investors and Treasury. The funds will also finance purchases through the issuance of fund indebtedness guaranteed by the FDIC.
  • Legacy Securities Funds will purchase commercial and residential mortgage backed securities from financial institutions. Treasury and private investors will provide equity capital to the funds. The funds will also have the ability to borrow from the Federal Reserve and Treasury.

 

Click here to read our client alert summarizing the Public-Private Investment Program.

If you have any questions about this program or another financial services matter, please contact either the Womble Carlyle attorney with whom you usually work or one of our Economic Stability & Solutions attorneys listed on the following webpage: Economic Stability & Solutions Attorneys.

Womble Carlyle client alerts are intended to provide general information about significant legal developments and should not be construed as legal advice on any specific facts and circumstances, nor should they be construed as advertisements for legal services.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice within this client alert is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in a client alert.