By Glenn Somerville and Jennifer Ablan
WASHINGTON/NEW YORK, Oct 5 (Reuters) - Three more investment funds have raised capital needed to receive government funds to let them begin buying troubled mortgage assets from banks, the Treasury Department said on Monday.
That means five of nine money-management firms tapped to buy toxic assets have raised the minimum $500 million each required to take part in the Public-Private Investment Program (PPIP) designed to clean up bank balance sheets.
Treasury expects the rest to do so by the end of October.
The program is being launched nearly a year after Congress authorized a $700 billion fund that was supposed to cleanse banks of unwanted mortgage-backed securities so they could resume lending following the financial crisis.
On Monday Treasury confirmed AllianceBernstein LP and its sub-advisors Greenfield Partners LLC and Rialto Capital Management LLC; BlackRock Inc and Wellington Capital Management had closed deals for $1.94 billion of private financing.
Treasury did not provide a breakdown of the capital raises in the program where private funds are matched with public money.
But BlackRock spokesman Brian Beades told Reuters the firm has met the minimum requirement of $500 million. BlackRock is launching both institutional and retail funds to enable big and small investors to buy bank assets tied to distressed commercial and residential non-agency mortgage-backed securities through the PPIP. BlackRock is targeting $500 million for the institutional fund and about $900 million for the retail fund.
Two others, Invesco Ltd and Trust Company of the West, or TCW, were named last week as the first public-private investment funds to raise the necessary capital to launch the program for buying toxic assets.
The PPIP has been scaled back significantly as banks have repaired their balance sheets by raising capital in the private sector without first unloading troubled assets, many of which are tied to bad mortgages.
When the plan was announced in March, Treasury hoped the funds could take up to $1 trillion of toxic assets from banks. But that target is now around $40 billion, made up of private and public investment plus debt financing.
Treasury provides debt financing for up to 100 percent of the total capital commitments of funds in the program, representing about $12.25 billion of total debt and equity commitments from the first five funds now participating in the program.
For more information on the program's mechanics, please see
Treasury initially said that funds would have until Oct. 8 to raise their required initial capital amounts.
Treasury now says timing of the closures depends partly on how funds raise the required $500 million of capital they need in order to get matching government funds, with some taking longer to complete public offerings targeted to public investors.
The four other managers chosen by the U.S. Treasury to launch fund-raising efforts were: Angelo Gordon & Co LP with GE Capital Real Estate; Marathon Asset Management LP; Oaktree Capital Management LP and RLJ Western Asset RLJ Western Asset Management LP.
(Reporting by Glenn Somerville and Jennifer Ablan; Editing by Andrew Hay)
((glenn.somerville@thomsonreuters.com; +1-202-898-8377; Reuters Messaging: glenn.somerville.reuters.com@reuters.net)) Keywords: USA TREASURY/TOXIC ASSETS (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON/NEW YORK, Oct 5 (Reuters) - Three more investment funds have raised capital needed to receive government funds to let them begin buying troubled mortgage assets from banks, the Treasury Department said on Monday.
That means five of nine money-management firms tapped to buy toxic assets have raised the minimum $500 million each required to take part in the Public-Private Investment Program (PPIP) designed to clean up bank balance sheets.
Treasury expects the rest to do so by the end of October.
The program is being launched nearly a year after Congress authorized a $700 billion fund that was supposed to cleanse banks of unwanted mortgage-backed securities so they could resume lending following the financial crisis.
On Monday Treasury confirmed AllianceBernstein LP and its sub-advisors Greenfield Partners LLC and Rialto Capital Management LLC; BlackRock Inc and Wellington Capital Management had closed deals for $1.94 billion of private financing.
Treasury did not provide a breakdown of the capital raises in the program where private funds are matched with public money.
But BlackRock spokesman Brian Beades told Reuters the firm has met the minimum requirement of $500 million. BlackRock is launching both institutional and retail funds to enable big and small investors to buy bank assets tied to distressed commercial and residential non-agency mortgage-backed securities through the PPIP. BlackRock is targeting $500 million for the institutional fund and about $900 million for the retail fund.
Two others, Invesco Ltd and Trust Company of the West, or TCW, were named last week as the first public-private investment funds to raise the necessary capital to launch the program for buying toxic assets.
The PPIP has been scaled back significantly as banks have repaired their balance sheets by raising capital in the private sector without first unloading troubled assets, many of which are tied to bad mortgages.
When the plan was announced in March, Treasury hoped the funds could take up to $1 trillion of toxic assets from banks. But that target is now around $40 billion, made up of private and public investment plus debt financing.
Treasury provides debt financing for up to 100 percent of the total capital commitments of funds in the program, representing about $12.25 billion of total debt and equity commitments from the first five funds now participating in the program.
For more information on the program's mechanics, please see
Treasury initially said that funds would have until Oct. 8 to raise their required initial capital amounts.
Treasury now says timing of the closures depends partly on how funds raise the required $500 million of capital they need in order to get matching government funds, with some taking longer to complete public offerings targeted to public investors.
The four other managers chosen by the U.S. Treasury to launch fund-raising efforts were: Angelo Gordon & Co LP with GE Capital Real Estate; Marathon Asset Management LP; Oaktree Capital Management LP and RLJ Western Asset RLJ Western Asset Management LP.
(Reporting by Glenn Somerville and Jennifer Ablan; Editing by Andrew Hay)
((glenn.somerville@thomsonreuters.com; +1-202-898-8377; Reuters Messaging: glenn.somerville.reuters.com@reuters.net)) Keywords: USA TREASURY/TOXIC ASSETS (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.