Maiden Lane LLC

For Release at
4:30 P.M. Eastern time
July 3, 2008

The Board's 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 of Maiden 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.

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 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.