Term Asset-Backed Securities Loan Facility (TALF)

March 06, 2009
The Federal Reserve Bank of New York established the Term Asset-Backed Securities Loan Facility to stimulate private capital to reenter the securitization markets by providing up to $1 trillion of financing to third party investors to acquire highly rated asset backed securities (“ABS”). In the first phase, up to $200 billion of TALF loans will be made available to finance the purchase of eligible ABS backed by student loans, automobile loans, credit card receivables, and Small Business Administration loans. The FRBNY is considering expanding eligible collateral to include highly rated commercial mortgage-backed securities, private label residential mortgage backed securities, collateralized loan obligations, collateralized debt obligations, and ABS backed by other assets. This update provides an overview of the first phase of the TALF program.