Tortuous TALF 2.0

May 15, 2020

Gregg Jubin comments on the Federal Reserve’s new TALF 2 emergency lending facility. The cost of a TALF loan is benchmarks plus 125bp (150bp in the case of CLOs), which is 25bp more than the original TALF program over a decade ago.

“TALF 1.0 provided below market rates for financing and that was what made it so attractive. Is plus 125bp or plus 150bp a rate at which anyone will utilise TALF with the restrictions that it imposes? The problem we’re seeing is that the price is high enough to have a chilling effect on the market,” says Gregg Jubin, a managing partner in the securitization practice at Cadwalader, Wickersham & Taft in Washington, DC.

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