The Federal Reserve Bank of New York will lend to a special purpose vehicle (SPV), which will provide non-recourse funding secured by eligible collateral to eligible borrowers. The U.S. Department of the Treasury, using funds appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), will make an equity investment in the SPV. The TALF was established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Secretary of the Treasury.
In May 2020, the New York Fed selected Pacific Investment Management Company LLC (PIMCO) as a third-party vendor to serve as collateral monitor for this facility. PIMCO was selected on a short-term basis for this role after considering its knowledge and experience in the ABS market, as well as its prior experience in TALF, which have allowed for a quick time to market. Following the launch of the facility, when sourcing a vendor is less time sensitive, the New York Fed will revisit this relationship.
In May 2020, the New York Fed selected The Bank of New York Mellon (BNYM) as a third-party vendor to serve as custodian and administrator for this facility. BNYM was selected on a short-term basis for this role after considering its operational and technological capabilities as well as its prior experience in TALF, which have allowed for a quick time to market. Following the launch of the facility, when sourcing a vendor is less time sensitive, the New York Fed will revisit this relationship.
Affiliates of the collateral monitor or the custodian may become TALF borrowers or act as investment managers for TALF borrowers organized as investment funds. As a result, the collateral monitor and custodian are subject to significant conflict of interest requirements that are available in the agreements below. Additionally, the New York Fed does not use the collateral monitor or custodian to assess the valuation of any collateral pledged or proposed by a borrower affiliated with or managed by the collateral monitor or custodian or their affiliates.
- Collateral Custody and Administration Agreement
- Collateral Monitor Agreement
- Control Agreement
- Credit Agreement
- Investment Memorandum of Understanding
- Legal Services Engagement Letter
- Limited Liability Company Agreement
- Preferred Equity Account Agreement
- Preferred Equity Investments Agreement
- Security Agreement