Bobcats owner to buy distressed assets
Charlotte Business Journal
Charlotte Bobcats owner Robert Johnson has set up a company to buy distressed assets under a U.S. Treasury Department program.
Johnson’s RLJ Cos. formed a venture with Legg Mason Inc. subsidiary Western Asset Management that has qualified as a fund manager for the U.S. Treasury Department’s Public-Private Investment Program.
RLJ, which is based in Bethesda, Md., will own 51 percent of the venture. Legg Mason (NYSE:LM) will own the balance.
PPIP is an effort to provide liquidity to the banking system by encouraging investors to buy mortgage-backed securities they hold. With rising default rates on underlying mortgages, the value of the securities has plummeted and a secondary market doesn’t exist. The federal government is earmarking $10 billion to subsidize the purchases.
Separately, Legg Mason said last month in a filing with the Securities and Exchange Commission that Western Asset plans to launch a $500 million fund to invest in “undervalued and distressed assets,” including residential and commercial mortgages, auto loans and credit-card debt.
Baltimore-based Legg Mason is an asset-management firm serving individual and institutional investors.
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