WHAT THEY’RE TALKING ABOUT AT TREASURY

Politico Playbook – August 6, 2009
http://www.politico.com/playbook/0809/playbook762.html

Private equity CEO Lynn Tilton, a colorful investor and industrialist, today is launching SMERescueLoans.com, a web site introducing a new economic proposal designed to save jobs in America and slow the rapid rise in unemployment. The program would create a public-private partnership to provide rescue loans to small and mid-sized enterprises (SMEs). The financial crisis has left a gaping hole in the capital markets. The dearth of lending to SMEs, those companies that provide more than 80 percent of U.S. employment, is forcing mass layoffs and asset liquidations. Using excess TARP funds previously set aside for the Treasury’s Public Private Investment Partnership (PPIP), Lynn’s program will co-invest with pre-approved private investment managers in senior-secured, first-lien loans to SME companies that have been denied or have lost routine working capital loans necessary to operate a business. Lynn says that without access to basic loans, many companies that might otherwise survive and flourish are forced to lay off workers or liquidate, driving unemployment and deepening the recession. In visits to the administration and Capitol Hill, she’s been arguing that the most direct and rapid solution to stem job losses is to incent private enterprise to originate and monetize rescue financing loans for struggling smaller and middle-market companies. The plan shares profits with the taxpayer, but protects taxpayer funds by requiring the private sector to take the first loss layer, bearing the bulk of risk.

SPOTTED -- The aforementioned Lynn Tilton, at the going-away Dana Manatos threw last night for big brother Chris Edwards (headed for NYC), at The Source bar in the Newseum. Dana and hubby Tom provided Georgetown Cupcakes to celebrate the birthday of W. Taylor Griffin, whose www.sulgravepartners.com has helped popularize Lynn’s idea. Also spotted: Jeanie Mamo.