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ARTICLE · 01 JUNE 2020

Municipal Liquidity Facility – Application Materials And Updated Term Sheet

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On May 18, 2020, the Federal Reserve Bank of New York (the "Reserve Bank") released application materials for the Municipal Liquidity Facility (the "Facility") established in connection with the Coronavirus Aid, Relief...

United StatesFinance and Banking
Adam Parker
Adam Parker
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On May 18, 2020, the Federal Reserve Bank of New York (the "Reserve Bank") released application materials for the Municipal Liquidity Facility (the "Facility") established in connection with the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Additionally, on May 11, 2020, the Federal Reserve released a revised term sheet (the "Term Sheet") for the Facility. This post summarizes the current structure, eligibility, application process and terms of the Facility.

Structure:

Under the Facility, the Reserve Bank will lend to Municipal Liquidity Facility, LLC, Delaware limited liability company (the "SPV") on a recourse basis where the loan is secured by the assets of the SPV. The SPV was created by the Reserve Bank as a special purpose vehicle to purchase eligible debt from Eligible Issuers at the time the debt is issued. The SPV will receive an initial equity investment of $35 billion from the Department of the Treasury ("Treasury") from funds

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