REVISED SOMA SECURITIES LENDING PROGRAM TERMS AND CONDITIONS
(POST 9/11/01)

Effective September 11^th, the Desk relaxed the following terms of the SOMA securities lending program (previously revised 9/7/99):

• Per dealer limit: $500 million total par in outstanding loans per dealer limit suspended until further notice;
• Per issue limit: $100 million per issue per dealer limit suspended until further notice;
• Fail penalty fee: outstanding loans to be extended at the original loan fee rate, instead of general collateral rate until further notice;

Note: : following the initial operation on 9/11 that commenced at 12:00 p.m. and closed at 12:15 p.m., the desk conducted a second securities lending operation between 1:00 p.m. and 2:00 p.m.

Effective September 13^th through September 17^th, the Desk continued to extend the relaxed securities lending program terms, with the following modification: minimum bid size raised to $25 million (from $1 million) to temporarily ease operational burdens.

Note: On September 13^th and 14^th, the securities lending operation was conducted between 1:30 p.m. and 2:15 p.m.; and on September 17^th, the operation was conducted between 11:30 a.m. and 12:15 p.m.

Effective September 18th :

• Minimum fee rate: minimum fee rate was lowered to 1.00%;
• Per issue limit: maximum bid amount for a single issue per dealer returned to $100 million;
• Minimum bid size: minimum bid size returned to $1 million;

Effective September 25^th, the fail penalty fee was reverted to general collateral. All other terms of the program as set on September 18^th remained effective.

Effective September 27^th through October 3^rd :

• SOMA lending limit: percentage of each Treasury issue owned by SOMA with a maturity of two weeks or longer that is available for lending each day was temporarily raised to 75% (from 45%);
• Per issue limit: maximum bid amount for a single issue per dealer was raised to $250 million, except for the 4 ¼% 11/15/03 and 5% 8/15/11 (due to portfolio limitations), which remained at $100 million per issue;

On October 3^rd, the Desk extended the relaxed securities lending program terms (in effect since 9/27) to October 10^th and further relaxed the per issue limit by raising it on the 4 ¼% 11/15/03 to $250 million.

On October 18^th, the Desk returned to its standard SOMA securities lending program terms, dated as September 7, 1999, except with respect to the minimum fee rate, which remained at 1.00%.

For more information on the standard SOMA securities lending program terms, please see:
August 26, 1999 - Announcement of Change in Lending Limits for SOMA Securities Lending Program,
September 7, 1999 - Revised SOMA Securities Lending Program – FAQs, and
September 7, 1999 - Revised SOMA Securities Lending Program Terms and Conditions.