Client Alert: Treasury Releases Capital Assistance Program Terms

February 25, 2009

On February 25, 2009, the U.S. Treasury  Department released terms for the  Capital Assistance Program which involve "stress testing" financial institutions and  focuse on  their ability to withstand even greater pressures than being experienced in the current environment .  The program is intended to provide institutions  with  contingent common equity as a bridge to private capital in the future ( the  so called  " mandatory convertible preferred  stock" which we have referenced in prior emails).

A White Paper, a Term Sheet and a FAQ on the program  can be found at www.FinancialStability.gov 

Patton Boggs  intends  to analyze the attached documentation more fully and will send out updates as appropriate.  In the interim, do not hesitate to contact  the attorneys listed below  should you have questions. 

Contributors: Norman B. Antin, Jeffrey D. Haas, Joseph G. Passaic, Kevin M. Houlihan, Carol R. Van Cleef