U.S. Treasury launches first toxic asset funds

October 1, 2009

U.S. Treasury launches first toxic asset funds
A "For Sale- Bank Owned" sign sits in front of a home in Pontiac, Michigan June 19, 2009. The decline of U.S. automakers has for years affected those who live in Pontiac. Now the city's dead look set to feel the pain as well. Mayor Clarence Phillips says "we can no longer afford" the $400,000 the city spends each year on the upkeep of cemeteries in light of fresh local plant closures and job losses at General Motors Corp, the largest employer and taxpayer in the city of 66,000. Picture taken June 19, 2009. REUTERS/Rebecca Cook (UNITED STATES TRANSPORT BUSINESS EMPLOYMENT)    WASHINGTON, Sept 30 (Reuters) – The first two funds involved in the government’s plan to purchase toxic assets have raised about $1.13 billion, the U.S. Treasury Department said on Wednesday.
   Invesco Ltd and Trust Company of the West, or TCW, are the first of the so-called Public-Private Investment Funds to raise the necessary capital to launch the program.
   Treasury said it expects the seven other funds will complete their initial closings throughout October.
   The launch of the program comes nearly a year after the U.S. Congress authorized a $700 billion fund to cleanse banks’ balance sheets of toxic assets. Officials shifted away from that idea and switched its focus to directly injecting capital in the banks.
   The Public-Private Investment Program, or PPIP, has been dramatically scaled back as banks have proven that they can raise capital in the private markets without first unloading troubled assets, many of them tied to bad mortgages. (Reporting by Karey Wutkowski, Doug Palmer and Jennifer Ablan in New York; Editing by Neil Stempleman) ((karey.wutkowski@thomsonreuters.com; +1 202 898 8374)) Keywords: FINANCIAL/BAILOUT PPIP 
Wednesday, 30 September 2009 21:30:00RTRS [nWEQ001435] {C}ENDS

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