Limited Sale of Toxic Assets | Marketwatch
You would have also noted the change in IMF estimates bringing the potential industry losses to $2.8 trillion of which less than half have been recognized as of yet in hope of recovering asset prices. European Banks are as usual the bigger perpetrators, not having recognized these losses. Needless to say, Private investors stayed away as use of government capital, provisioning and IFRS are being put into limited use by the global banks not used to disclosures and public vilification..retail interest is almost non existent, much like the early years of debt markets in Asia and now in Africa as people compare the risk and the return unfavourably with good old Gold and Oil
Private investors have injected $1.13 billion of funds into a much-anticipated Treasury Department program seeking to remove toxic mortgage securities from financial institutions, the Treasury Department said Wednesday.The plan, known as the Public Private Investment Partnership, or PPIP, has the Treasury investing up to $30 billion of equity and debt into the program to match as much as $10 billion put up by private investors. Treasury will match up to $10 billion in equity from private investors along with as much as $20 billion in debt financing.The purchases would be made through auctions, and the government financing and equity was included to give the private investors an incentive to participate.As part of the initial investments, Ivesco Ltd. And The TCW Group Inc. have each committed $500 million to the program.The $1.13 billion of private capital has been matched 100% by Treasury, representing a total equity capital commitment of $2.26 billion. Treasury also is providing debt financing capital bringing the total purchasing ability of the firms to $4.52 billion.”I am pleased with the progress we have made in launching PPIP,” Treasury Secretary Tim Geithner said in a statement. “This program allows Treasury to partner with leading investment management firms to increase the flow of private capital into the market for legacy securities and give taxpayers a chance to share in the profits.”Treasury acknowledged that the program is much smaller than it initially envisioned because “financial market conditions have improved.” The program was originally envisioned to remove $1 trillion of toxic securities from financial institutions. However, Treasury said it would expand the program, if needed.