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Home > News & Events > Press Releases

Press Release
December 19, 2008

Federal Reserve releases revised information
detailing operational aspects of Term AssetBacked Securities Loan Facility (TALF)
For immediate release
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The Federal Reserve Board on Friday released revised terms and
conditions and questions and answers detailing operational aspects of
the Term Asset-Backed Securities Loan Facility (TALF). The revised
terms and conditions were determined after consultation with assetbacked securities (ABS) issuers, investors, and dealers, and include an
extension of the TALF loan maturity from one to three years and
additional specification of eligible ABS collateral. In addition, to provide
more certain investor access, TALF loans will be provided to all eligible
borrowers with eligible collateral rather than distributed through an
auction. The documents will be subject to further refinement in coming
weeks based on continued market analysis and consultation and on
clarification of operational details.
The Board authorized the TALF on November 24, 2008 under section
13(3) of the Federal Reserve Act. The TALF is designed to increase
credit availability and support economic activity by facilitating renewed
issuance of consumer and small business asset-backed securities
(ABS). The ABS markets historically have funded a substantial share of
consumer credit and SBA-guaranteed small business loans, but
conditions in ABS markets have caused issuance of such securities to
come to a standstill in recent months.

Under the TALF, the Federal Reserve Bank of New York will finance the
purchase of eligible ABS by investors. The TALF will finance only certain
newly issued, highly rated ABS collateralized by student loans, auto
loans, credit card loans, and loans guaranteed by the Small Business
Administration.
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Last Update: December 19, 2008

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