Term Asset-Backed Securities Loan Facility

On March 23, 2020, the Federal Reserve established the Term Asset-Backed Securities Loan Facility (TALF) to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), leveraged loans, commercial mortgages, and certain other assets.

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.


Vendors

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.

Facility Agreements
Data
Subscription and Closing Dates
Subscription Date
Closing Date
August 19, 2020
August 28, 2020
September 3, 2020
September 16, 2020
September 18, 2020
September 29, 2020
October 6, 2020
October 16, 2020
October 21, 2020
October 30, 2020
November 5, 2020
November 17, 2020
November 20, 2020
December 4, 2020
December 10, 2020
December 21, 2020
Reporting
Video: The Term Asset-Backed Securities Loan Facility, Explained
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Contacts

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Andrea Priest
andrea.priest@ny.frb.org

Brian Manning
brian.manning@ny.frb.org