Available today on the Federal Reserve Website is a press release detailing the Term Asset-Backed Securities Loan Facility (TALF).
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:
- TALF loans will have a term of 3 years and will be non-recourse to borrowers
- Borrowers mus pledge eligible collateral to the New York Fed to receive a TALF loan
- 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
|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
|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|