Three more investment firms have raised sufficient capital to participate in the joint partnership with the government to purchase toxic assets from banks, according to Associated Press.
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The Treasury Department said Alliance Bernstein LP and BlackRock Inc., both headquartered in New York City, and Wellington Management Co., based in Boston, had all raised the $500 million minimum to begin operations.
Those three firms join the first two to clear all the hurdles for participation last Wednesday, Invesco Ltd. and the TCW Group Inc.
The goal of the program is to rid banks of bad loans so they can resume more normal lending, which is key for sustaining any economic recovery.
With the three new additions, the total purchasing power to obtain banks' soured assets has increased to $12.27 billion, Treasury said.
The government effort, known as the Public-Private Investment Program, or PPIP, has been plagued by delays and some analysts wonder how successful it will be in buying banks' bad assets.
In July, Treasury said that nine firms had qualified to participate in the PPIP program and they were given time to raise at least $500 million each, money that will be matched from the government's $700 billion bailout program.
Treasury said that so far private investors in the five firms have come up with $3.07 billion, which Treasury has matched equally.
In addition, the firms will be able to borrow an additional $6.13 billion from Treasury to bring the total amount available to purchase toxic assets to $12.27 billion.
The government's current goal is to provide $30 billion in Treasury investment to all of the funds participating. With contributions from the private sector, that would push the total available to buy toxic assets to $40 billion.
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