Update on the Federal Reserve Bank of New York Term Asset-Backed Securities Loan Facility

In November 2008, the Federal Reserve Board established the Term Asset-Backed Securities Loan Facility (TALF) to provide $200 billion in non-recourse financing by the Federal Reserve Bank of New York (FRBNY) to eligible borrowers owning eligible asset-backed securities (ABS).  On February 10, 2009, the Treasury announced that, under the Financial Stability Plan, the TALF would be expanded to provide up to $1 trillion in financing.  On May 1, 2009, the FRBNY announced that, beginning in June 2009, certain commercial mortgage-backed securities (CMBS) would be eligible for TALF funding; eligible CMBS will be highly-rated and of recent origin.  The FRBNY will cease making TALF loans on December 31, 2009, unless the program is extended by the Board of Governors.  In guest article, Alyson B. Stewart and Lawrence D. Bragg, III, Associate and Partner, respectively, at Ropes & Gray LLP, provide a comprehensive summary of terms of the TALF based on publications of the FRBNY and their experience representing borrowers in the TALF subscriptions to date.

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