News
April 17, 2020

Term Asset-Backed Securities Loan Facility

Coronavirus: Financial Services Advisory
Language

To help our clients navigate the coronavirus (COVID-19) crisis, Arnold & Porter has established a Coronavirus Task Force covering a wide range of issues and challenges. Subscribe to our "Coronavirus (COVID-19)" mailing list to receive our latest client Advisories and register for upcoming webinars.

On March 23, 2020, the Board of Governors of the Federal Reserve System (the Federal Reserve) announced that it will establish the Term Asset-Backed Securities Loan Facility (TALF II), as part of a package of initiatives to mitigate the disruptive effect of the coronavirus pandemic on the US economy. TALF II is a credit facility, authorized under section 13(3) of the Federal Reserve Act, through which the Federal Reserve Bank of New York (the Reserve Bank) will commit to lend to a special purpose vehicle (SPV), on a recourse basis, against certain types of asset-backed securities (ABS) that satisfy specified eligibility criteria.

The SPV initially will make up to $100 billion of loans available. The US Department of the Treasury (the US Treasury), using the Exchange Stabilization Fund, will make a $10 billion equity investment in the SPV, and the remaining $90 billion will come from the proceeds of recourse loans from the Reserve Bank.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

Email Disclaimer