The following highlights some of the key changes made to the MLSA from the February 18 posting:
- The revised MLSA now provides for the alternative settlement mechanic where the underwriter of New Acquisition Collateral is the same as the borrower's Applicable Primary Dealer. In this case, the Haircut Amount need not be paid to the Custodian.
- The revised MLSA now permits the Market Value of Items of Collateral to exceed 100% of par (but not greater than 110% of par); provided, that TALF Loans may not be made against any such "Above Par Collateral unless the TALF Standing Loan Facility Procedures provide for a Required Monthly Amortization Amount with respect to any such Above Par Collateral. The Required Monthly Amortization Amount will be designed to amortize the premium on such Above Par Collateral.
- The revised MLSA now provides that floating rate TALF Loans that are secured by SBA 7(a) collateral will bear interest at a spread to the Fed Funds target rate, rather than LIBOR.
- For all Floating Rate Loans, the date on which the reference rate for the first Loan Accrual Period will be calculated has been changed from two Business Days before the beginning of the Loan Accrual Period to the Loan Subscription Date.
- The revised MLSA clarifies that the SPV created to hold Collateral received by FRBNY (as well as any other transferees of Collateral) will be entitled to the same recourse rights as FRBNY. This provision does not change the extent of recourse, if any.
- The revised MLSA clarifies that Borrowers electing to exercise their right to walk away from their loans are expected to deliver a Collateral Surrender and Acceptance Notice on or before maturity.