The Federal Reserve Bank of New York today announced the first loan subscription date for the Term Asset-Backed Securities Loan Facility (TALF) and released an expanded set of Frequently Asked Questions (FAQs) and other documents pertaining to the facility’s operations. The TALF’s first subscription date for loans backed by eligible asset-backed securities (ABS) will be June 17, 2020, and the first loan closing date will be June 25, 2020.
The TALF was established to increase credit availability and support economic activity by facilitating renewed issuance of ABS, thereby increasing the availability of credit to households and businesses.
Under the TALF, the New York Fed will lend to a special purpose vehicle (TALF SPV), which will provide non-recourse funding secured by eligible collateral to eligible borrowers. On fixed days each month, borrowers will be able to request one or more three-year TALF loans.
The New York Fed has published a Master Loan and Security Agreement (MLSA), which provides further details on the terms that will apply to TALF loans.
The Board of Governors of the Federal Reserve System and the Secretary of the Treasury approved the establishment of the TALF, and the Department of the Treasury, using funds appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act, will make a $10 billion equity investment in the TALF SPV.
The TALF will operate in accordance with the additional details explained in the FAQs and other documents released today.
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