Key Documents Pertaining to Maiden Lane LLC

8/14/2019 Key Documents Pertaining to Maiden Lane LLC

1/99

Key Documents Pertaining toMaiden Lane, LLC

Reid Mack, Managing Director


2/99

Key Documents Pertaining toMaiden Lane, LLC

CONTENTS

Page 3 Factors Affecting Reserve Balances of DepositoryInstitutions and Condition Statement of Federal Reserve Banks Inclusion of Maiden Lane LLC

Page 5 Statistical Release H.4.1 of July 3rd, 2008

Page 10 - Statistical Release H.4.1 of July 10th, 2008



Page 26 - Statistical Release H.4.1 of July 31st, 2008

Page 31 - Statistical Release H.4.1 of August 14th, 2008

Page 36 Consolidated Financial Statement for 2008 andIndependent Auditors Report

Page 59 Investment Management Agreement between BlackRockand the New York Fed.

Reid Mack, Managing Director


3/99

For Release at4:30 P.M. Eastern time

July 3, 2008

The Boards H.4.1 statistical release, Factors Affecting Reserve Balances of Depository Institutions

and Condition Statement of Federal Reserve Banks, has been modified to include information

related to Maiden Lane LLC, a limited liability company formed to facilitate the arrangements

associated with JPMorgan Chase & Co.s acquisition of Bear Stearns Companies, Inc.

On June 26, 2008, the Federal Reserve Bank of New York (FRBNY) extended credit to Maiden

Lane LLC under the authority of section 13(3) of the Federal Reserve Act. This limited liability

company was formed to acquire certain assets of Bear Stearns and to manage those assets through

time to maximize repayment of the credit extended and to minimize disruption to financial markets.

Payments by Maiden Lane LLC from the proceeds of the net portfolio holdings will be made in the

following order: operating expenses of the LLC, principal due to the FRBNY, interest due to the

FRBNY, principal due to JPMorgan Chase & Co., and interest due to JPMorgan Chase & Co. Any

remaining funds will be paid to the FRBNY.

Consistent with generally accepted accounting principles, the assets and liabilities of Maiden Lane

LLC have been consolidated with the assets and liabilities of the FRBNY in the preparation of the

statements of condition shown on the release because the FRBNY is the primary beneficiary ofMaiden Lane LLC.

The consequences of this consolidation appear on the release in the following ways. The extension

of credit from the FRBNY to Maiden Lane LLC is eliminated as is the accrued interest on this loan.

The net portfolio holdings of Maiden Lane LLC appear as an asset on the statement of condition of

the FRBNY (table 5), the consolidated statement of condition of all Federal Reserve Banks (table 4),

and factors affecting reserve balances of depository institutions (table 1). The liabilities of Maiden

Lane LLC to entities other than the FRBNY are included in other liabilities and capital in table 1

and in other liabilities and accrued dividends in table 4 and table 5.

Information on the LLC is presented separately in the newly created table 2, Information on

Principal Accounts of Maiden Lane LLC. This table presents the fair value of the net portfolio

holdings of the LLC along with the book value of the outstanding principal of the loan extended by

the FRBNY, the book value of accrued interest payable to the FRBNY, and the book value of

outstanding principal and accrued interest on the loan payable to JPMorgan Chase & Co.

Information pertaining to fair values will be updated quarterly.

FEDERAL RESERVE statistical release


4/99

July 3, 2008

Explanatory Note for H.4.1 release of July 3, 2008

The weekly average value of net portfolio holdings of Maiden Lane LLC reflects holdings from

Thursday June 26, 2008, through Wednesday July 2, 2008. The holdings for the first six days of this

week are based on values as of March 14, 2008. The holdings for the last day were valued as of June

26, 2008.



5/99

Reserve Bank credit, related items, andreserve balances of depository institutionsat Federal Reserve Banks

Reserve Bank credit 890,030 + 15,448 + 32,542 871,653Securities held outright 478,838 + 65 - 311,693 478,866

U.S. Treasury1 478,838 + 65 - 311,693 478,866Bills2 21,740 0 - 255,279 21,740Notes and bonds, nominal2 412,392 0 - 62,280 412,392Notes and bonds, inflation-indexed2 39,171 0 + 4,712 39,171Inflation compensation3 5,535 + 65 + 1,154 5,563

Federal agency2 0 0 0 0Repurchase agreements4 110,250 - 11,429 + 83,071 113,000Term auction credit 150,000 0 + 150,000 150,000Other loans 16,780 - 4,094 + 16,584 12,920

Primary credit 14,861 + 159 + 14,843 12,814Secondary credit 86 + 86 + 86 0Seasonal credit 95 + 18 - 83 105Primary dealer credit facility 1,738 - 4,357 + 1,738 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 29,816 + 29,816 + 29,816 28,893Float -1,518 - 373 - 555 -18,288Other Federal Reserve assets 105,864 + 1,462 + 65,319 106,262

Gold stock 11,041 0 0 11,041Special drawing rights certificate account 2,200 0 0 2,200Treasury currency outstanding6 38,861 + 14 + 340 38,861

Total factors supplying reserve funds 942,132 + 15,462 + 32,882 923,755

Currency in circulation6 826,758 + 3,811 + 11,951 832,369Reverse repurchase agreements7 42,177 + 1,803 + 9,983 41,091

Foreign official and international accounts 42,177 + 1,803 + 9,983 41,091

Dealers 0 0 0 0Treasury cash holdings 278 + 2 - 31 275Deposits with F.R. Banks, other than reserve balances 12,480 - 31 + 1,104 11,553

U.S. Treasury, general account 5,042 - 28 + 435 4,139Foreign official 129 + 29 - 11 109Service-related 7,053 - 2 + 659 7,054

Required clearing balances 7,053 - 2 + 659 7,054Adjustments to compensate for float 0 0 0 0

Other 256 - 29 + 19 251Other liabilities and capital8 46,473 + 2,020 + 6,967 45,431

Total factors, other than reserve balances,absorbing reserve funds 928,166 + 7,605 + 29,974 930,717

Reserve balances with Federal Reserve Banks 13,965 + 7,856 + 2,907 -6,962


July 3, 2008

H.4.1

Factors Affecting Reserve Balances of Depository Institutions andCondition Statement of Federal Reserve Banks

1. Factors Affecting Reserve Balances of Depository InstitutionsMillions of dollars

Averages of daily figures

Note: Components may not sum to totals because of rounding.

1. Includes securities lent to dealers under the overnight and term securities lending facilities; refer to table 1A.2. Face value of the securities.3. Compensation that adjusts for the effect of inflation on the original face value of inflation-indexed securities.4. Cash value of agreements.5. Fair value. Refer to table 2 and the note on consolidation accompanying table 5.6. Estimated.7. Cash value of agreements, which are collateralized by U.S. Treasury securities.8. Includes the liabilities of Maiden Lane LLC to entities other than the Federal Reserve Bank of New York, including liabilities that have

recourse only to the portfolio holdings of Maiden Lane LLC. Refer to table 2 and the note on consolidation accompanying table 5.

Sources: Federal Reserve Banks and the U.S. Department of the Treasury.

Change from week ended WednesdayJul 2, 2008

Week endedJul 2, 2008 Jun 25, 2008 Jul 4, 2007


6/99

WednesdayJul 2, 200

Holdings

U.S. Treasurysecurities2

Marketable securities held in custody for foreignofficial and international accounts1 2,345,653 + 23,278 + 363,485 2,347,266

U.S. Treasury 1,373,770 + 20,336 + 133,108 1,377,312

Federal agency 971,882 + 2,941 + 230,375 969,953Securities lent to dealers 117,482 + 5,410 + 107,341 113,939

Overnight facility2 13,238 + 7,626 + 3,097 9,842Term facility3 104,244 - 2,216 + 104,244 104,097

H.4.1

1A. Memorandum Items, July 2, 2008Millions of dollars


Week endedJul 2, 2008


Jun 25, 2008 Jul 4, 2007


1. Face value of the securities. Includes U.S. Treasury STRIPS and other zero-coupon bonds at face value.2. Fully collateralized by U.S. Treasury securities.3. Fully collateralized by U.S. Treasury securities, federal agency securities, and highly rated non-agency asset-backed and mortgage-backed

securities.


3. Maturity Distribution of Term Auction Credit, Other Loans, and Securities, July 2, 2008Millions of dollars

Term auctioncredit Weekly

changes

Otherloans1

Repurchaseagreements3

Reverserepurchase

agreements3

Note: Components may not sum to totals because of rounding.. . . Not applicable.

1. Excludes the loan from the Federal Reserve Bank of New York to Maiden Lane LLC that was eliminated when preparing that Bank's statementof condition consistent with consolidation under generally accepted accounting principles. The loan to Maiden Lane LLC is designed to berepaid from the orderly liquidation of Maiden Lane LLC's portfolio holdings and does not have a fixed amortization schedule.

2. Includes the original face value of inflation-indexed securities and compensation that adjusts for the effect of inflation on the original face valueof such securities.

3. Cash value of agreements.

Remaining maturity

150,000

0

...

...

...

...

150,000

Within 15 days16 days to 90 days

91 days to 1 yearOver 1 year to 5 yearsOver 5 years to 10 yearsOver 10 years

All

3,654

9,266

0...

...

...

12,920

3,409

41,661

73,632173,465

90,136

96,563

478,866

- 2,446

+ 2,460

- 2,349+ 2,362

+ 15

+ 28

+ 70

73,000

40,000

...

...

...

...

113,000

41,09

..

..

..

..

41,09

2. Information on Principal Accounts of Maiden Lane LLCMillions of dollars

Net portfolio holdings of Maiden Lane LLC1

Outstanding principal amount of loan extended by the Federal Reserve Bank of New York 2

Accrued interest payable to the Federal Reserve Bank of New York2

Outstanding principal amount and accrued interest on loan payable to JPMorgan Chase & Co. 3

28,89

28,82

1

1,15

1. Fair value. Fair value reflects an estimate of the price that would be received upon selling an asset if the transaction were to be conducted in anorderly market on the measurement date. Revalued quarterly. This table reflects valuations as of June 26, 2008.

2. Book value. This amount was eliminated when preparing the Federal Reserve Bank of New York's statement of condition consistent withconsolidation under generally accepted accounting principles. Refer to the note on consolidation accompanying table 5.

3. Book value. The fair value of these obligations is included in other liabilities and capital in table 1 and in other liabilities and accrued dividends itable 4 and table 5.

Note: On June 26, 2008, the Federal Reserve Bank of New York (FRBNY) extended credit to Maiden Lane LLC under the authority of section 13(3)of the Federal Reserve Act. This limited liability company was formed to acquire certain assets of Bear Stearns and to manage those assetsthrough time to maximize repayment of the credit extended and to minimize disruption to financial markets. Payments by Maiden Lane LLC fromthe proceeds of the net portfolio holdings will be made in the following order: operating expenses of the LLC, principal due to the FRBNY, interestdue to the FRBNY, principal due to JPMorgan Chase & Co., and interest due to JPMorgan Chase & Co. Any remaining funds will be paid to theFRBNY.

Memorandum item

Account name


7/99


1. Includes securities lent to dealers under the overnight and term securities lending facilities; refer to table 1A.2. Face value of the securities.3. Compensation that adjusts for the effect of inflation on the original face value of inflation-indexed securities.4. Cash value of agreements, which are collateralized by U.S. Treasury and federal agency securities.5. Fair value. Refer to table 2 and the note on consolidation accompanying table 5.6. Includes assets denominated in foreign currencies, which are revalued daily at market exchange rates.7. Cash value of agreements, which are collateralized by U.S. Treasury securities.8. Includes exchange-translation account reflecting the daily revaluation at market exchange rates of foreign exchange commitments.9. Includes the liabilities of Maiden Lane LLC to entities other than the Federal Reserve Bank of New York, including liabilities that have recourse

only to the portfolio holdings of Maiden Lane LLC. Refer to the note on consolidation accompanying table 5.

AssetsGold certificate account 11,037 0 0Special drawing rights certificate account 2,200 0 0

Coin1,317 - 16 + 393

Securities, repurchase agreements, term auctioncredit, and other loans 754,785 - 19,164 - 66,204

Securities held outright 478,866 + 70 - 311,687U.S. Treasury1 478,866 + 70 - 311,687

Bills2 21,740 0 - 255,279Notes and bonds, nominal2 412,392 0 - 62,280Notes and bonds, inflation-indexed2 39,171 0 + 4,712Inflation compensation3 5,563 + 69 + 1,160

Federal agency2 0 0 0Repurchase agreements4 113,000 - 16,750 + 82,750Term auction credit 150,000 0 + 150,000Other loans 12,920 - 2,482 + 12,734

Net portfolio holdings of Maiden Lane LLC5 28,893 + 28,893 + 28,893Items in process of collection (659) 1,234 + 21 - 3,682Bank premises 2,154 0 + 109Other assets6 104,120 + 1,795 + 65,832

Total assets (659) 905,739 + 11,527 + 25,340

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 795,095 + 7,132 + 13,719Reverse repurchase agreements7 41,091 - 958 + 8,882Deposits (0) 20,730 + 3,343 - 508

Depository institutions 16,232 + 3,399 - 523U.S. Treasury, general account 4,139 - 69 + 22Foreign official 109 + 9 + 13Other (0) 251 + 5 - 18

Deferred availability cash items (659) 3,393 + 765 - 2,429Other liabilities and accrued dividends8,9 4,549 + 752 - 1,116

Total liabilities (659) 864,857 + 11,033 + 18,546

Capital accounts

Capital paid in 19,876 - 1 + 3,713Surplus 18,493 + 7 + 3,094Other capital accounts 2,512 + 488 - 15

Total capital 40,882 + 495 + 6,794

H.4.1

4. Consolidated Statement of Condition of All Federal Reserve BanksMillions of dollars

Change since

WednesdayJul 4, 2007

Eliminations fromconsolidation Wednesday

Jul 2, 2008WednesdayJun 25, 2008

Assets, liabilities, and capital


8/99


9/99


10/99


Reserve Bank credit 887,866 - 2,164 + 33,967 882,042Securities held outright 478,925 + 87 - 311,662 478,951


Federal agency2 0 0 0 0Repurchase agreements4 113,357 + 3,107 + 90,464 107,000Term auction credit 150,000 0 + 150,000 150,000Other loans 13,014 - 3,766 + 12,776 13,332

Primary credit 12,856 - 2,005 + 12,813 12,985Secondary credit 57 - 29 + 57 250Seasonal credit 101 + 6 - 94 97Primary dealer credit facility 0 - 1,738 0 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 28,900 - 916 + 28,900 28,944Float -1,361 + 157 - 1,358 -1,566Other Federal Reserve assets 105,031 - 833 + 64,845 105,382


Total factors supplying reserve funds 939,982 - 2,149 + 34,315 934,158

Currency in circulation6 833,093 + 6,335 + 15,767 832,959Reverse repurchase agreements7 42,984 + 807 + 11,260 41,276

Foreign official and international accounts 42,984 + 807 + 11,260 41,276

Dealers 0 0 0 0Treasury cash holdings 275 - 3 - 38 280Deposits with F.R. Banks, other than reserve balances 12,729 + 249 + 1,032 11,877

U.S. Treasury, general account 5,180 + 138 + 268 4,355Foreign official 100 - 29 + 5 100Service-related 7,195 + 142 + 764 7,195

Required clearing balances 7,195 + 142 + 764 7,195Adjustments to compensate for float 0 0 0 0

Other 254 - 2 - 5 227Other liabilities and capital8 44,348 - 2,125 + 4,909 43,969

Total factors, other than reserve balances,absorbing reserve funds 933,430 + 5,264 + 32,930 930,362

Reserve balances with Federal Reserve Banks 6,553 - 7,412 + 1,386 3,796


July 10, 2008

H.4.1









Week endedJul 9, 2008 Jul 2, 2008 Jul 11, 2007


11/99


12/99





Coin1,299 - 18 + 372




Federal agency2 0 0 0Repurchase agreements4 107,000 - 6,000 + 86,500Term auction credit 150,000 0 + 150,000Other loans 13,332 + 412 + 13,124

Net portfolio holdings of Maiden Lane LLC5 28,944 + 51 + 28,944Items in process of collection (619) 1,668 + 434 - 5,035Bank premises 2,154 0 + 108Other assets6 103,244 - 876 + 64,273

Total assets (619) 899,829 - 5,910 + 26,631

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 795,659 + 564 + 15,768Reverse repurchase agreements7 41,276 + 185 + 9,980Deposits (0) 15,693 - 5,037 - 317

Depository institutions 11,010 - 5,222 + 287U.S. Treasury, general account 4,355 + 216 - 559Foreign official 100 - 9 + 5Other (0) 227 - 24 - 50

Deferred availability cash items (619) 3,231 - 162 - 3,882Other liabilities and accrued dividends8,9 3,678 - 871 - 2,019

Total liabilities (619) 859,537 - 5,320 + 19,530

Capital accounts

Capital paid in 19,880 + 4 + 3,715Surplus 18,493 0 + 3,094Other capital accounts 1,918 - 594 + 291

Total capital 40,291 - 591 + 7,100

H.4.1


Change since



Jul 9, 2008Wednesday

Jul 2, 2008



13/99


14/99


15/99

For Release at4:30 P.M. Eastern time

July 17, 2008

The weekly average value of net portfolio holdings of Maiden Lane LLC reflects holdings from

Thursday, July 10, 2008, through Wednesday, July 16, 2008. The holdings for the first six days of

this week are based on the values as of June 26, 2008. The holdings for the last day were based on

values as of June 30, 2008, the quarterly revaluation date. The fair value of the net portfolio

holdings will be updated quarterly.



16/99


Reserve Bank credit 888,418 + 552 + 34,759 895,160Securities held outright 479,004 + 79 - 311,636 479,036


Federal agency2 0 0 0 0Repurchase agreements4 111,143 - 2,214 + 88,607 116,750Term auction credit 150,000 0 + 150,000 150,000Other loans 14,301 + 1,287 + 13,941 16,192

Primary credit 13,916 + 1,060 + 13,771 16,097Secondary credit 279 + 222 + 279 0Seasonal credit 98 - 3 - 118 94Primary dealer credit facility 9 + 9 + 9 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 28,955 + 55 + 28,955 29,019Float -1,344 + 17 - 618 -2,072Other Federal Reserve assets 106,359 + 1,328 + 65,511 106,236


Total factors supplying reserve funds 940,548 + 566 + 35,117 947,289

Currency in circulation6 830,117 - 2,976 + 16,121 830,730Reverse repurchase agreements7 42,046 - 938 + 10,480 43,007

Foreign official and international accounts 42,046 - 938 + 10,480 43,007

Dealers 0 0 0 0Treasury cash holdings 279 + 4 - 71 272Deposits with F.R. Banks, other than reserve balances 12,285 - 444 + 1,243 11,669

U.S. Treasury, general account 4,711 - 469 + 537 4,036Foreign official 101 + 1 - 23 102Service-related 7,195 0 + 764 7,195

Required clearing balances 7,195 0 + 764 7,195Adjustments to compensate for float 0 0 0 0

Other 278 + 24 - 34 336Other liabilities and capital8 45,073 + 725 + 5,723 45,003

Total factors, other than reserve balances,absorbing reserve funds 929,800 - 3,630 + 33,495 930,681

Reserve balances with Federal Reserve Banks 10,748 + 4,196 + 1,622 16,608


July 17, 2008

H.4.1











17/99


Holdings


Marketable securities held in custody for foreignofficial and international accounts1 2,347,973 - 2,065 + 351,954 2,349,163

U.S. Treasury 1,364,058 - 11,364 + 112,581 1,363,223

Federal agency 983,915 + 9,299 + 239,372 985,941Securities lent to dealers 104,270 - 5,505 + 99,592 103,860

Overnight facility2 4,142 - 1,879 - 536 4,260Term facility3 100,128 - 3,626 + 100,128 99,600

H.4.1





Jul 9, 2008 Jul 18, 2007



securities.




changes

Otherloans1


Reverserepurchase

agreements3





Remaining maturity

150,000

0

...

...

...

...

150,000



All

5,272

10,919

0...

...

...

16,192

13,215

31,854

74,878172,629

89,829

96,631

479,036

+ 8,396

- 8,396

+ 1,240- 863

- 326

+ 34

+ 85

76,750

40,000

...

...

...

...

116,750

43,00

..

..

..

..

43,00






29,01

28,82

3

1,15





Memorandum item

Account name


18/99





Coin1,311 + 12 + 330

Securities, repurchase agreements, term auctioncredit, and other loans 761,977 + 12,695 - 56,185



Federal agency2 0 0 0Repurchase agreements4 116,750 + 9,750 + 89,500Term auction credit 150,000 0 + 150,000Other loans 16,192 + 2,860 + 15,940

Net portfolio holdings of Maiden Lane LLC5 29,019 + 75 + 29,019Items in process of collection (610) 1,067 - 601 - 2,162Bank premises 2,157 + 3 + 111Other assets6 104,205 + 961 + 65,154

Total assets (610) 912,972 + 13,143 + 36,265

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 793,421 - 2,238 + 16,477Reverse repurchase agreements7 43,007 + 1,731 + 10,500Deposits (0) 28,403 + 12,710 + 3,800

Depository institutions 23,929 + 12,919 + 4,013U.S. Treasury, general account 4,036 - 319 - 64Foreign official 102 + 2 - 191Other (0) 336 + 109 + 42

Deferred availability cash items (610) 3,139 - 92 - 661Other liabilities and accrued dividends8,9 4,190 + 512 - 1,488


Capital accounts

Capital paid in 19,884 + 4 + 3,715Surplus 18,493 0 + 3,094Other capital accounts 2,437 + 519 + 830

Total capital 40,814 + 523 + 7,640

H.4.1


Change since



Jul 16, 2008Wednesday

Jul 9, 2008



19/99


20/99


21/99




Federal agency2 0 0 0 0Repurchase agreements4 104,786 - 6,357 + 85,929 103,750Term auction credit 150,000 0 + 150,000 150,000Other loans 16,510 + 2,209 + 16,271 17,830

Primary credit 16,381 + 2,465 + 16,378 17,675Secondary credit 34 - 245 + 34 60Seasonal credit 96 - 2 - 140 94Primary dealer credit facility 0 - 9 0 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 29,025 + 70 + 29,025 29,059Float -1,405 - 61 - 478 -1,790Other Federal Reserve assets 104,973 - 1,386 + 63,826 104,425



Currency in circulation6 830,025 - 92 + 17,557 831,505Reverse repurchase agreements7 42,610 + 564 + 11,110 42,149


Dealers 0 0 0 0Treasury cash holdings 278 - 1 - 39 312Deposits with F.R. Banks, other than reserve balances 13,115 + 830 + 1,205 14,404

U.S. Treasury, general account 5,419 + 708 + 367 6,720Foreign official 101 0 + 6 101Service-related 7,261 + 66 + 795 7,261

Required clearing balances 7,261 + 66 + 795 7,261Adjustments to compensate for float 0 0 0 0

Other 335 + 57 + 37 322Other liabilities and capital8 43,900 - 1,173 + 4,523 42,737

Total factors, other than reserve balances,absorbing reserve funds 929,928 + 128 + 34,354 931,108

Reserve balances with Federal Reserve Banks 5,194 - 5,554 - 1,020 3,432


July 24, 2008

H.4.1











22/99


Holdings



U.S. Treasury 1,372,424 + 8,366 + 119,166 1,376,744

Federal agency 981,026 - 2,889 + 231,295 984,086Securities lent to dealers 116,556 + 12,286 + 111,924 119,494

Overnight facility2 4,999 + 857 + 367 5,944Term facility3 111,557 + 11,429 + 111,557 113,550

H.4.1





Jul 16, 2008 Jul 25, 2007



securities.




changes

Otherloans1


Reverserepurchase

agreements3





Remaining maturity

75,000

75,000

...

...

...

...

150,000



All

4,105

13,725

0...

...

...

17,830

12,024

36,437

71,492172,656

89,847

96,665

479,121

- 1,191

+ 4,583

- 3,386+ 27

+ 18

+ 34

+ 85

63,750

40,000

...

...

...

...

103,750

42,14

..

..

..

..

42,14






29,05

28,82

5

1,15





Memorandum item

Account name


23/99





Coin1,334 + 23 + 287




Federal agency2 0 0 0Repurchase agreements4 103,750 - 13,000 + 85,000Term auction credit 150,000 0 + 150,000Other loans 17,830 + 1,638 + 17,584

Net portfolio holdings of Maiden Lane LLC5 29,059 + 40 + 29,059Items in process of collection (627) 1,431 + 364 - 664Bank premises 2,158 + 1 + 103Other assets6 102,272 - 1,933 + 62,737

Total assets (627) 900,192 - 12,780 + 32,512

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 794,244 + 823 + 17,761Reverse repurchase agreements7 42,149 - 858 + 11,040Deposits (0) 18,111 - 10,292 + 225

Depository institutions 10,968 - 12,961 - 1,590U.S. Treasury, general account 6,720 + 2,684 + 1,789Foreign official 101 - 1 + 3Other (0) 322 - 14 + 22

Deferred availability cash items (627) 2,951 - 188 - 415Other liabilities and accrued dividends8,9 2,521 - 1,669 - 3,230

Total liabilities (627) 859,976 - 12,183 + 25,381

Capital accounts

Capital paid in 19,904 + 20 + 3,733Surplus 18,494 + 1 + 3,095Other capital accounts 1,818 - 619 + 303

Total capital 40,216 - 598 + 7,131

H.4.1


Change since



Jul 23, 2008WednesdayJul 16, 2008



24/99


25/99


26/99


Reserve Bank credit 892,783 + 9,805 + 35,113 901,186Securities held outright 479,174 + 85 - 311,584 479,206


Federal agency2 0 0 0 0Repurchase agreements4 113,714 + 8,928 + 87,928 123,250Term auction credit 150,000 0 + 150,000 150,000Other loans 17,644 + 1,134 + 17,393 17,377

Primary credit 17,452 + 1,071 + 17,450 17,279Secondary credit 89 + 55 + 89 0Seasonal credit 101 + 5 - 148 98Primary dealer credit facility 3 + 3 + 3 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 29,065 + 40 + 29,065 29,099Float -1,322 + 83 - 463 -1,931Other Federal Reserve assets 104,507 - 466 + 62,773 104,185


Total factors supplying reserve funds 944,941 + 9,819 + 35,489 953,343

Currency in circulation6 830,800 + 775 + 18,418 832,779Reverse repurchase agreements7 43,536 + 926 + 10,201 44,463


Dealers 0 0 0 0Treasury cash holdings 313 + 35 + 21 318Deposits with F.R. Banks, other than reserve balances 12,778 - 337 + 1,057 11,966

U.S. Treasury, general account 5,094 - 325 + 220 4,271Foreign official 101 0 + 5 101Service-related 7,261 0 + 796 7,261

Required clearing balances 7,261 0 + 796 7,261Adjustments to compensate for float 0 0 0 0

Other 322 - 13 + 35 333Other liabilities and capital8 42,838 - 1,062 + 3,359 42,368

Total factors, other than reserve balances,absorbing reserve funds 930,265 + 337 + 33,057 931,894

Reserve balances with Federal Reserve Banks 14,676 + 9,482 + 2,432 21,449


July 31, 2008

H.4.1









Week endedJul 30, 2008 Jul 23, 2008 Aug 1, 2007


27/99


Holdings



U.S. Treasury 1,384,418 + 11,994 + 132,242 1,394,631

Federal agency 983,256 + 2,230 + 225,483 981,693Securities lent to dealers 126,653 + 10,097 + 120,569 134,715

Overnight facility2 4,876 - 123 - 1,208 11,567Term facility3 121,777 + 10,220 + 121,777 123,148

H.4.1





Jul 23, 2008 Aug 1, 2007



securities.




changes

Otherloans1


Reverserepurchase

agreements3





Remaining maturity

150,000

0

...

...

...

...

150,000



All

3,061

14,316

0...

...

...

17,377

14,547

35,967

69,445172,683

89,865

96,699

479,206

+ 2,523

- 470

- 2,047+ 27

+ 18

+ 34

+ 85

83,250

40,000

...

...

...

...

123,250

44,46

..

..

..

..

44,46






29,09

28,82

6

1,15





Memorandum item

Account name


28/99





Coin1,386 + 52 + 290




Federal agency2 0 0 0Repurchase agreements4 123,250 + 19,500 + 98,500Term auction credit 150,000 0 + 150,000Other loans 17,377 - 453 + 17,142

Net portfolio holdings of Maiden Lane LLC5 29,099 + 40 + 29,099Items in process of collection (489) 805 - 626 - 1,621Bank premises 2,161 + 3 + 108Other assets6 102,025 - 247 + 62,512

Total assets (489) 918,546 + 18,354 + 44,434

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 795,563 + 1,319 + 18,610Reverse repurchase agreements7 44,463 + 2,314 + 12,917Deposits (0) 33,417 + 15,306 + 11,174

Depository institutions 28,712 + 17,744 + 11,628U.S. Treasury, general account 4,271 - 2,449 - 498Foreign official 101 0 + 6Other (0) 333 + 11 + 38

Deferred availability cash items (489) 2,736 - 215 - 1,172Other liabilities and accrued dividends8,9 1,985 - 536 - 3,839


Capital accounts

Capital paid in 19,937 + 33 + 3,288Surplus 18,501 + 7 + 3,090Other capital accounts 1,946 + 128 + 368

Total capital 40,383 + 167 + 6,745

H.4.1


Change since

WednesdayAug 1, 2007


Jul 30, 2008WednesdayJul 23, 2008



29/99


30/99


31/99




Federal agency2 0 0 0 0Repurchase agreements4 105,786 - 4,714 + 69,500 118,250Term auction credit 150,000 0 + 150,000 150,000Other loans 17,807 + 344 + 17,536 17,651

Primary credit 17,699 + 329 + 17,688 17,552Secondary credit 7 + 7 + 7 0Seasonal credit 100 + 7 - 160 99Primary dealer credit facility 0 0 0 0Other credit extensions 0 0 0 0

Net portfolio holdings of Maiden Lane LLC5 29,145 + 40 + 29,145 29,179Float -1,120 + 60 - 75 -991Other Federal Reserve assets 101,987 - 1,984 + 60,473 101,594



Currency in circulation6 831,170 - 397 + 18,810 832,192Reverse repurchase agreements7 42,458 - 1,332 + 11,101 44,172

Foreign official and international accounts 42,458 - 1,332 + 11,101 44,172

Dealers 0 0 0 0Treasury cash holdings 298 - 17 + 39 296Deposits with F.R. Banks, other than reserve balances 12,510 + 147 + 846 12,142

U.S. Treasury, general account 4,859 - 21 + 124 4,715Foreign official 319 + 204 + 224 101Service-related 7,007 - 12 + 445 7,007

Required clearing balances 7,007 - 12 + 445 7,007Adjustments to compensate for float 0 0 0 0

Other 325 - 23 + 52 319Other liabilities and capital8 40,577 - 2,236 + 540 39,982

Total factors, other than reserve balances,absorbing reserve funds 927,013 - 3,835 + 31,336 928,783

Reserve balances with Federal Reserve Banks 7,990 - 2,300 - 15,818 18,335


August 14, 2008

H.4.1








Change from week ended WednesdayAug 13, 2008

Week endedAug 13, 2008 Aug 6, 2008 Aug 15, 2007


32/99


Holdings


Marketable securities held in custody for foreignofficial and international accounts1 2,394,883 - 801 + 390,062 2,394,588

U.S. Treasury 1,415,828 - 3,015 + 171,866 1,419,375

Federal agency 979,054 + 2,212 + 218,195 975,212Securities lent to dealers 131,154 - 1,705 + 126,453 131,057

Overnight facility2 2,837 - 5,160 - 1,864 2,211Term facility3 128,318 + 3,456 + 128,318 128,846

H.4.1

1A. Memorandum Items, August 13, 2008Millions of dollars


Week endedAug 13, 2008

Change from week ended WednesdayAug 13, 2008

Aug 6, 2008 Aug 15, 2007



securities.


3. Maturity Distribution of Term Auction Credit, Other Loans, and Securities, August 13, 2008Millions of dollars


changes

Otherloans1


Reverserepurchase

agreements3





Remaining maturity

150,000

0

...

...

...

...

150,000



All

3,354

14,297

0...

...

...

17,651

21,201

25,759

69,504175,596

89,907

97,467

479,434

+ 2,161

- 2,162

+ 7+ 33

+ 21

+ 43

+ 104

78,250

40,000

...

...

...

...

118,250

44,17

..

..

..

..

44,17






29,17

28,82

8

1,16





Memorandum item

Account name


33/99





Coin1,378 - 1 + 340




Federal agency2 0 0 0Repurchase agreements4 118,250 + 13,500 + 94,250Term auction credit 150,000 0 + 150,000Other loans 17,651 + 147 + 17,387

Net portfolio holdings of Maiden Lane LLC5 29,179 + 40 + 29,179Items in process of collection (532) 1,600 - 914 - 908Bank premises 2,162 + 2 + 95Other assets6 99,435 - 1,860 + 63,245

Total assets (532) 912,326 + 11,019 + 43,422

LiabilitiesFederal Reserve notes, net of F.R. Bank holdings 795,101 - 747 + 19,312Reverse repurchase agreements7 44,172 + 974 + 12,231Deposits (0) 30,480 + 14,415 + 12,424

Depository institutions 25,345 + 14,483 + 12,780U.S. Treasury, general account 4,715 - 83 - 394Foreign official 101 0 + 5Other (0) 319 + 16 + 33

Deferred availability cash items (532) 2,592 - 1,577 - 846Other liabilities and accrued dividends8,9 -136 - 1,848 - 6,103


Capital accounts

Capital paid in 19,935 - 2 + 3,156Surplus 18,505 + 3 + 3,093Other capital accounts 1,678 - 197 + 155

Total capital 40,117 - 198 + 6,403

H.4.1


Change since



Aug 13, 2008Wednesday

Aug 6, 2008



34/99


35/99


36/99

Maiden Lane LLC(A Special Purpose Vehicle Consolidated by theFederal Reserve Bank of New York)

Consolidated Financial Statements for the PeriodMarch 14, 2008 to December 31, 2008, andIndependent Auditors Report


37/99

MAIDEN LANE LLC

TABLE OF CONTENTS

Page

CONSOLIDATED STATEMENTS FOR THE PERIOD MARCH 14, 2008 TODECEMBER 31, 2008:

Independent Auditors Report 1

Consolidated Statement of Financial Condition 2

Consolidated Statement of Income 3

Consolidated Statement of Cash Flows 4

Notes to Consolidated Financial Statements 521


38/99


39/99

2

Maiden Lane LLC

Consolidated Statement of Financial Condition

As of December 31, 2008(Amounts in thousands, except per share data)

Assets

Investments, at fair value 25,340,301$

Cash and cash equivalents 2,531,488

Swap contracts, at fair value 2,453,774

Interest and principal receivable 132,501

Other receivables 177,047

Total assets 30,635,111$

Liabilities and Member's Equity

Senior loan payable, at fair value 25,683,812$

Subordinated loan payable, at fair value -

Cash collateral on swap contracts 2,571,684

Payable for investments purchased 2,368,738

Other liabilities and accrued expenses 10,877

Total liabilities 30,635,111

Member's equity share ($10 par value, 1 share issued and outstanding) -

Total liabilities and member's equity 30,635,111$

The accompanying notes are an integral part of these consolidated financial statements.


40/99

3

Maiden Lane LLC

Consolidated Statement of Income

For the Period March 14, 2008 to December 31, 2008(Amounts in thousands)

Operating Income

Interest income 1,560,868$

36,626

(5,534,489)

Total operating income (3,936,995)

Expenses

Loan interest expense 305,035

Other interest expense 294,591

Professional fees 54,134

Total expenses 653,760

Total net operating loss (4,590,755)

Non-operating income

Unrealized gains on loans payable 4,590,755

Total non-operating income 4,590,755

Net Income -$

Realized gains on investments and swap contracts, net

Unrealized losses on investments and swap contracts, net



41/99

4

Maiden Lane LLC

Consolidated Statement of Cash Flows

For the Period March 14, 2008 to December 31, 2008(Amounts in thousands)

Cash flows from operating activities

Net increase in member's equity resulting from operations -$

Adjustments to reconcile net iincrease in member's equity from operations

to net cash provided by operating activities:

Amortization of investments (454,286)

Unrealized losses on investments 5,587,514

Unrealized gains on swap contracts (155,038)

Unrealized gains on loans payable (4,590,755)

Realized gains on investments and swap contracts (36,626)Increase in accrued interest capitalized on the loans 305,035

Increase in interest and principal receivable (132,501)

Increase in other receivables (177,047)

Increase in other liabilities and accrued expenses 10,877

Net cash flow provided by operating activities 357,173

Cash flows from investing activities

Payments for purchases of investments, net of payable for investments purchased (38,212,188)

Proceeds from sales and principal paydowns on investments 10,214,029

Purchase of swap contracts (3,331,956)

Proceeds from disposition of swap contracts 963,214

Net cash flow used in investing activities (30,366,901)

Cash flows from financing activities

Proceeds from loans 29,969,532

Proceeds from collateral received on swap contracts 2,571,684

Net cash cash flow provided by financing activities 32,541,216

Net increase in cash and cash equivalents 2,531,488

Beginning cash and cash equivalents -

Ending cash and cash equivalents 2,531,488$



42/99

Maiden Lane LLC

Notes to Consolidated Financial Statements

For the Period March 14, 2008 to December 31, 2008

5

1. Organization and Nature of Business

In connection with and to facilitate the merger of The Bear Stearns Companies Inc. (Bear Stearns)and JPMorgan Chase & Co. (JPMC), Maiden Lane LLC, a Delaware limited liability company(a Special Purpose Vehicle consolidated by the Federal Reserve Bank of New York) (the LLC),was formed to acquire approximately $30 billion of Bear Stearns assets. The LLC is a singlemember limited liability company and the Federal Reserve Bank of New York (FRBNY orManaging Member) is the sole and managing member. FRBNY is the controlling party of theassets of the LLC and will remain as such as long as the FRBNY retains an economic interest.Financing for the LLC was provided by FRBNY, as the senior lender (the Senior Loan), and byJPMC, as the subordinated lender (the Subordinated Loan) (together the Loans). The loans arecollateralized by all the assets of the LLC.

The Bear Stearns assets purchased by the LLC largely consisted of mortgage-related securities, wholemortgage loans (held by two grantor trusts as discussed below), a total return swap with JPMC, aswell as mortgage commitments to be announced (TBA commitments).

Two grantor trusts were established to directly acquire the whole mortgage loan assets. One wasformed to acquire the portfolio of commercial mortgage loans and one was formed to acquire theportfolio of residential mortgage loans (Maiden Lane Commercial Mortgage Backed SecuritiesTrust 2008-I and Maiden Lane Asset Backed Securities I Trust 2008-1, together the GrantorTrusts). The Grantor Trusts own the whole mortgage loans. The LLC owns the trust certificatesrepresenting all of the beneficial ownership interest in each trust and as a result controls andconsolidates the Grantor Trusts. The trustee and master servicers for each Grantor Trust arenationally recognized financial institutions. As master servicers to the Grantor Trusts, they areresponsible for remitting to the Grantor Trusts all principal and interest payments and any otheramounts collected by the primary loan servicers on the underlying loans of each respective trust.

Payments received by the respective trust are passed on to the LLC as the sole beneficiary afterdeducting certain trust expenses, advances, servicing costs, and fees.

The assets acquired by the LLC secure the Loans made by the lenders. All assets were acquired andtransferred to the LLC on June 26, 2008 with an effective valuation date of March 14, 2008. Alltransactions associated with the purchased assets occurring subsequent to March 14, 2008 areincluded in the consolidated financial statements of the LLC.

In connection with the acquisition of the assets, the LLC paid a cost of carry of $249 million to JPMC,representing a financing cost incurred from March 14, 2008 through the settlement dates on thevarious assets. The cost of carry is recorded as Other interest expense in the ConsolidatedStatement of Income. The transaction was completed based upon a March 14, 2008 purchase datebut with settlement dates of June 26, 2008 or later. Due to the extended settlement dates, interest

was charged on the cost of securities purchased or credited for cash flows on the purchasedsecurities that occurred after March 14, 2008 through the date the securities were either paid for orreceived by the LLC.

The LLC does not have any employees and therefore does not bear any employee-related costs.


43/99

Maiden Lane LLC



6

BlackRock Financial Management, Inc. (the Investment Manager or BlackRock) manages theinvestment portfolio of the LLC under the guidance established by the FRBNY and governed byan investment management agreement between the FRBNY and BlackRock.

2. Summary of Significant Accounting Policies

The consolidated financial statements are prepared in accordance with the accounting principlesgenerally accepted in the United States of America (GAAP), which require the ManagingMember to make estimates and assumptions that affect the reported amounts of assets andliabilities and the reported amounts of income and expense during the reporting period. Actualresults could differ from those estimates. Significant estimates include the fair value ofinvestments, swap contracts and loans payable.

The following is a summary of the significant policies consistently followed by the LLC:

A. ConsolidationThe consolidated financial statements include the accounts and results of operations of the LLC and

the portfolio holdings within the Grantor Trusts, in which the LLC has interests. Intercompanybalances and transactions have been eliminated in consolidation.

The consolidation of variable interest entities (VIEs) was assessed in accordance with FinancialAccounting Standards Board (FASB) Interpretation No. 46 (revised), Consolidation of VariableInterest Entities (FIN 46R), which requires the variable interest entity to be consolidated by itsprimary beneficiary.

The LLC will consolidate a VIE if it is the primary beneficiary as it will absorb a majority of theentitys expected losses, receive a majority of the expected residual returns, or both. In makingthis determination, the LLC evaluates the VIEs design and capital structure, and the relationshipsamong the variable interest holders. The LLC reconsiders whether it is a primary beneficiary of aVIE when certain events occur as required by FIN 46R.

The LLC holds certain interests in VIEs. The LLC is not deemed to be the primary beneficiary for anysignificant VIEs and therefore has not consolidated any VIEs. The LLCs involvement with theVIEs it holds in its portfolio is limited to its role as an investor. It receives cash flows related tothese investments (principal and interest) in accordance with each entitys governing document.The fair value of the LLCs significant interests in VIEs, which represent its total maximumexposure to loss at December 31, 2008, was approximately $690 million.

B. Cash and Cash EquivalentsThe LLC defines cash and cash equivalents to be highly liquid investments with original maturities of

three months or less, when acquired.


44/99

Maiden Lane LLC



7

C.

Valuation of Financial Assets and Liabilities

The LLC accounts for its financial assets and liabilities at fair value under various accountingliterature, including Statement of Financial Accounting Standards (SFAS) No. 115, Accountingfor Certain Investments in Debt and Equity Securities (SFAS 115), SFAS No.133, Accountingfor Derivative Instruments and Hedging Activities (SFAS 133), and SFAS No. 159, Fair ValueOption for Financial Assets and Liabilities (SFAS 159).

The LLC follows the guidance in SFAS 115 when accounting for investments in debt securities. TheLLC classifies its debt securities as available-for-sale, and has elected the fair value option for alleligible assets and liabilities under SFAS 159.

The unrealized gains and losses on items for which the FVO is elected are reported in earnings. Theunrealized gains and losses are the amount by which the estimated fair value of the instrumentsdiffers from the previous period estimated fair value. Upfront costs and fees related to items forwhich the FVO is elected are recognized in earnings as incurred and not deferred.

The LLC elected the FVO for all investments in securities and whole mortgage loans as of theireffective acquisition date and for the Loans as of the date the Loans were extended. FRBNYbelieves that accounting for these assets and liabilities at fair value appropriately reflects theLLCs purpose and intent with respect to its financial assets and liabilities and most closelyreflects the amount of the assets available to liquidate the LLCs obligations. Refer to Note 4.

D. Investment TransactionsInvestment transactions are accounted for at trade date. Interest income is recorded when earned and

includes amortization of premiums, accretion of discounts and paydown gains and losses onCollateralized Mortgage Obligations (CMOs) and Collateralized Debt Obligations (CDOs).Realized gains or losses on security transactions are determined on the identified cost basis.

E. Accounting for Loans PayableThe consolidated financial statements reflect the fair value of the Loans payable and related accrued

and capitalized interest at fair value. Fair value is determined based on the allocation of the LLCsgains and losses in order of priority in accordance with applicable agreements, as described inNote 3, and the LLC believes that the methodology is a fair representation of the present value offuture cash flows expected to be available to repay the Loans.


45/99

Maiden Lane LLC



8

F.

Professional Fees

BlackRock has been hired as Investment Manager for the assets of the LLC under a multi-year contractthat includes provisions governing termination. State Street Bank and Trust has been hired toprovide administrative, collateral administrative and custodial services and appointed to serve ascollateral agent under multi-year contracts that includes provisions governing termination of thecontract.

The fees charged by the Investment Manager, State Street, auditors and organization costs are recordedin Professional fees on the Consolidated Statement of Income.

Organization and closing costs of $21 million associated with the formation and incorporation of theLLC and the acquisition of the portfolio were expensed as incurred.

G. Income TaxesThe LLC is a single member limited liability corporation and was structured as a disregarded entity

for U.S. Federal, state and local income tax purposes. Accordingly, no provision for income taxesis made in the consolidated financial statements.

H. Recently Issued Accounting StandardsIn December 2008, FASB issued FASB Staff Position (FSP) No. FAS 140-4 and FIN 46R-8,

Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests inVariable Interest Entities. FSP FAS 140-4 and FIN 46R-8 amend FASB Statement No. 140, to

require public entities to provide additional disclosures about transfers of financial assets. Theyalso amend FIN 46(R), to require public entities, including sponsors that have a variable interest ina variable interest entity, to provide additional disclosures about their involvement with variableinterest entities. The adoption of the additional disclosure requirements of FSP FAS 140-4 andFIN 46R-8 did not materially impact the LLCs consolidated financial statements.

In October 2008, FASB issued Staff Position FSP 157-3, Determining the Fair Value of a FinancialAsset When the Market for That Asset Is Not Active (FSP 157-3). FSP 157-3, clarifies howSFAS No. 157 Fair Value Measurements should be applied when valuing securities in marketsthat are not active. For additional information on the effects of the adoption of this accountingpronouncement, see Note 4.

In September 2008, FASB issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives

and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB InterpretationNo. 45; and Clarification of the Effective Date of FASB Statement No. 161. FSP 133-1 requiresexpanded disclosures about credit derivatives and guarantees. The expanded disclosurerequirements for FSP 133-1 are effective for the LLCs consolidated financial statements for theperiod ended December 31, 2008 and are incorporated in the accompanying notes.


46/99

Maiden Lane LLC



9

In March 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and HedgingActivities (SFAS 161), which requires expanded qualitative, quantitative and credit-riskdisclosures about derivatives and hedging activities and their effects on the LLCs consolidatedfinancial position, financial performance and cash flows. SFAS 161 is effective for the LLCsfinancial statements for the year beginning on January 1, 2009 and it is not expected to have amaterial effect on the LLCs consolidated financial statements.

In February 2008, FASB issued FSP FAS 140-3, Accounting for Transfers of Financial Assets andRepurchase Financing Transactions. FSP FAS 140-3 requires that an initial transfer of a financialasset and a repurchase financing that was entered into contemporaneously with, or incontemplation of, the initial transfer be evaluated together as a linked transaction under SFAS 140,unless certain criteria are met. FSP FAS 140-3 is effective for the LLCs consolidated financialstatements for the year beginning on January 1, 2009, and earlier adoption is not permitted. Theprovisions of this standard are not expected to have a material effect on the LLCs financial

statements.

In February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial Assets andFinancial Liabilities, including an amendment of FASB Statement No. 115 (SFAS 159), whichprovides companies with an irrevocable option to elect fair value as the measurement for selectedfinancial assets, financial liabilities, unrecognized firm commitments and written loancommitments that are not subject to fair value under other accounting standards. There is a one-time election available to apply this standard to existing financial instruments as of January 1,2008; otherwise, the fair value option will be

Key Documents Pertaining to Maiden Lane LLC

Documents

Transcript of Key Documents Pertaining to Maiden Lane LLC