Treasury’s Distressed Debt Plan Said to Begin With $20 Billion
July 3, 2009 by admin
The U.S. Treasury Department may begin its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when it was announced in March, two people familiar with the matter said.
The Treasury plans provide about $1.1 billion in capital to eight to 10 money managers it will pick for the Public-Private Investment Program, according to the people, who asked not to be identified before the details are announced. The firms will raise about $1.1 billion each for funds to buy distressed mortgage securities, less than they had expected the government to support. The plan also will include about $10 billion in government-backed loans.
The government unveiled the program when losses tied to home loans hobbled banks such as Citigroup Inc. and Bank of America Corp. and threatened to choke off lending needed to revive the economy. Read more about the distressed debt plan…
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