TALF Update: New Guidance Available, Program to Launch this Month


On March 3, 2009, the Board of Governors of the U.S. Federal Reserve System (the “Federal Reserve”) and the U.S. Treasury Department announced the details of the Term Asset-Backed Securities Loan Facility (“TALF”). The general terms of the program had been announced in mid-February. TALF aims to jump-start the stalled securitization markets by providing nonrecourse loans to hedge funds and other purchasers of certain AAA-rated asset-backed securities (“ABS”) backed by newly and recently originated automobile loans, credit card loans, student loans, and SBA-guaranteed small business loans, thereby reopening lending to consumers for automobiles, education and credit cards and to small businesses. The program will initially offer $200 billion in loans, possibly expanding to $1 trillion. The first loans are expected to be made on March 25, 2009 with a maturity date of March 26, 2012.

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