The FED releases TALF Details & Timelines

Available today on the Federal Reserve Website is a press release detailing the Term Asset-Backed Securities Loan Facility (TALF).

See Fed Release

The aim of TALF is to increase the availability of credit to US consumers and business by facilitating the renewed issuance of ABS secured by Consumer Loans ans SBA Loans and CMBS secured by Commercial Mortgage Loans.  TALF will provide Financing for investors to purchase ABS and CMBS from banks and dealers in the primary and secondary markets.  Currently spreads on these asset types have widened to levels that do not correspond with default levels expected by the industry.  The FED & Treasury believe feel that investors will accept tighter spreads on loans with the backing of TALF.

Some quick data points:

  1. TALF loans will have a term of 3 years and will be non-recourse to borrowers
  2. Borrowers mus pledge eligible collateral to the New York Fed to receive a TALF loan
  3. TALF will be available to all US companies that own eligible collateral and maintain an account relationship with a primary dealer.

This is nothing specific for Newark, however it does mean that money should become available from the top of the market down.  Hopefully this will bring a little life back to the market and we will see a pick up in the volume of transactions.  See this post from Robert Knakal’s StreetWise blog.

Here are the dates – put them in your calendar…

Key Dates for the TALF
Schedule for First Funding with Initial Eligible Assets

Date Announcement/Event
March 3, 2009 Launch of the TALF. Publication of the details for the first funding
March 3-17, 2009 Marketing first funding to investors
March 17, 2009 Subscriptions for first funding for TALF recorded
March 25, 2009 First funds from the TALF disbursed

Schedule for Second Funding

Date Announcement/Event
March 24, 2009 Announcement of details of second funding
March 24-April 7, 2009 Marketing second funding to investors
April 7, 2009 Subscriptions for second funding for TALF recorded
April 14, 2009 Second funds from the TALF disbursed
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