Barclays Capital

• Schecky Schechner, Managing Director, Head of U.S. Real Estate Investment Banking
• 24 pages
• Confidential
• March 27, 2009

TALF – Overview
Term Asset-Backed Securities Loan Facility (TALF)

• Announced November 25, 2008
• The government’s objective is to lend up to $1 trillion to revive the Asset Backed Securities (ABS) market and consumer lending
• On March 3rd, the Federal Reserve announced it is prepared to expand eligible collateral to include newly issued AAA CMBS collateral (“TALF 2.0”)
• On March 23rd, further expansion plans announced, to include “legacy” AAA-rated RMBS / CMBS as eligible collateral (“TALF 3.0”)
• TALF was officially launched on March 17th
• TALF will stop lending on December 31st, 2009

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PPIP Overview
Public – Private Investment Program (PPIP)

• On March 23rd, PPIP was launched in an effort to facilitate the injection of new capital into the market
• Primary Objectives
• Facilitate price discovery
• Re-start lending and restore liquidity through unlocking capital
• Two programs
• Legacy Loans Program: FDIC and Treasury will establish Public-Private Investment Funds (“PPIFs”) to cleanse bank balance sheets of distressed loans and other assets
• Legacy Securities Program: Federal Reserve and Treasury will establish PPIFs to address troubled securities

Legacy Loans Program
Overview

• Banks Identify pools of loans to be sold
• FDIC, banking regulators and Treasury determine eligible assets
• FDIC determines amount it is willing to finance, up to 6-to-1 leverage
• FDIC will conduct an auction for the pools

– The highest bidder will have access to 50% of the equity funding by the Public-Private Investment Fund

• PPIFs created with 1:1 equity contribution from private investors and the Treasury
• Private partners retain asset management control
• The government receives interest on money lent and shares profits and losses on the equity portion

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