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Press Release
April 27, 2020

Federal Reserve Board announces an expansion of the scope and
duration of the Municipal Liquidity Facility
For release at 4:30 p.m. EDT

The Federal Reserve Board on Monday announced an expansion of the scope and duration of the Municipal
Liquidity Facility (MLF). The facility, which was announced on April 9 as part of an initiative to provide up to
$2.3 trillion in loans to support U.S. households, businesses, and communities, will offer up to $500 billion in
lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.
The facility, as revised, will purchase up to $500 billion of short-term notes issued by U.S. states (including the
District of Columbia), U.S. counties with a population of at least 500,000 residents, and U.S. cities with a
population of at least 250,000 residents. The new population thresholds allow substantially more entities to
borrow directly from the MLF than the initial plan announced on April 9. The facility continues to provide for
states, cities, and counties to use the proceeds of notes purchased by the MLF to purchase similar notes
issued by, or otherwise to assist, other political subdivisions and governmental entities. The expansion
announced today also allows participation in the facility by certain multistate entities.
To be eligible for the facility, notes must mature no later than 36 months from the date of issuance—an
increase from the previously announced 24-month maximum term. In addition, among other rating
requirements, eligible issuers must have had an investment grade rating as of April 8, 2020, from at least two
major nationally recognized statistical rating organizations. The termination date for the facility has been
extended to December 31, 2020 in order to provide eligible issuers more time and flexibility.
The Federal Reserve is also considering expanding the MLF to allow a limited number of governmental
entities that issue bonds backed by their own revenue to participate directly in the MLF as eligible issuers.
Any decision to include any such additional eligible issuers would be publicly announced at a future date. The
Federal Reserve will continue to closely monitor conditions in primary and secondary markets for municipal
securities and will evaluate whether additional measures are needed to support the flow of credit and liquidity
to state and local governments.
The MLF is established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury
Secretary. The Treasury will provide $35 billion of credit protection to the Federal Reserve for the facility using
funds appropriated by the Coronavirus Aid, Relief, and Economic Security Act.
The Federal Reserve remains committed to using its full range of tools to support the flow of credit to
households, businesses, and communities to counter the economic impact of the coronavirus pandemic and
promote a swift recovery once the disruptions abate.
For media inquiries, call 202-452-2955.

Term sheet: Municipal Liquidity Facility
Frequently Asked Questions

Frequently Asked Questions: Appendix A

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Board Votes
Municipal Liquidity Facility

Last Update: April 27, 2020