Term Asset-Backed Securities Loan Facility Update

This article was originally published 8 February, 2009

On February 6, 2009, the Federal Reserve Board released additional terms and conditions, including preliminary loan rates and collateral haircuts, relating to its previously announced Term Asset-Backed Securities Loan Facility ("TALF"). Under the TALF, the Federal Reserve Bank of New York ("FRBNY") will make up to $200 billion of non-recourse loans available to eligible borrowers to enable them to purchase certain asset-backed securities ("ABS"). Hedge funds, private equity funds, mutual funds and other investment vehicles may borrow under the TALF so long as they satisfy the eligibility requirements. A forthcoming Master Loan and Security Agreement ("MLSA") will provide further details on the terms applicable to TALF borrowings. The initial TALF subscription and loan settlement dates are expected to be announced later this month, contingent on the completion of work necessary to make the TALF operational. The