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On April 9, 2020, the Federal Reserve unveiled an array of additional programs to bolster the U.S. economy in response to the COVID-19 pandemic. One of those programs is aimed at expanding the coverage of the Federal Reserve’s previously announced Term Asset- Backed Securities Loan Facility (TALF). TALF is a facility intended to help lenders meet the credit needs of households and U.S. businesses by supporting the issuance of asset-backed securities. A summary of the facility is available here.
Today’s announcement includes the following updates to the TALF program:
These updates are reflected in a new term sheet released by the Federal Reserve that is available here. The term sheet includes the “haircut” schedule that will be imposed on the different asset-classes that are permitted to be purchased under the TALF, which is consistent with the schedule used for the TALF program established in 2008. A comparison of the term sheet released on April 9, 2020 against the original term sheet released on March 23, 2020 is available here.
As the Federal Reserve and the Treasury Department finalize the programs, they continue to seek input from lenders, borrowers and other stakeholders. Comments may be sent until April 16, 2020 on the feedback form provided here.