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- May 2009: Vol. 21 No. 5

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Scaling the Mountain of Debt Together: Public Private Investment Program Unveiled

by Wayne Brandt

Facing trillions of dollars of maturing commercial real estate loans during the next several years, a zombie-like mortgage market and a deepening financial crisis, the U.S. government has stepped up its regulatory efforts to try to put an end to the downward spiral. But it won’t go at it alone. In March, the government announced the Public Private Investment Program (PPIP), which will enlist the help of investors by enticing them to purchase troubled debt by providing attractive financing and a co-investment of nearly $1 trillion to leverage the market. The goal is to move troubled securities and whole loans off banks’ balance sheets, allowing lending institutions to free up capital and begin extending new credit. The move could be a game changer for the lending markets, which are closed.

SHRINKING SUPPLY           

During the credit expansion years, CMBS providers, life insurance companies and th

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