The Federal Reserve Board has released revised terms and conditions and questions and answers detailing operational aspects of the Term Asset-Backed Securities Loan Facility (TALF).The revised terms and conditions were determined after consultation with asset-backed securities (ABS) issuers, investors and dealers and include an extension of the TALF loan maturity from one to three years and additional specification of eligible ABS collateral.
In addition, to provide more certain investor access, TALF loans will be provided to all eligible borrowers with eligible collateral rather than distributed through an auction.The documents will be subject to further refinement in coming weeks based on continued market analysis and consultation and on clarification of operational details.
Under the TALF, the Federal Reserve Bank of New York will finance the purchase of eligible ABS by investors. The TALF will finance only certain newly issued, highly rated ABS collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration.
See press release for full details.