Treasury and Federal Reserve Extend TALF Subscription Period

In November 2008, the Treasury Department and the Federal Reserve announced the Term Asset-Backed Lending Facility program (TALF) with the goal of improving credit market conditions for consumers and small businesses by providing attractive financing to investors who purchase certain asset-backed securities (ABS) that meet the requirements set forth below.

On March 3, 2009, the Treasury Department and the Federal Reserve announced that the Federal Reserve Bank of New York (the New York Fed) will lend up to $200 billion to “eligible borrowers” to finance such borrowers’ ABS purchases. The New York Fed will begin accepting subscriptions for the first round of funding at 10:00 a.m. ET on March 17, as previously anticipated; however, the New York Fed has extended the period during which it will accept subscriptions through 5:00 p.m. ET on March 19 in order to allow potential borrowers more time to complete the required documentation. After the first funding, TALF will provide additional fundings on a monthly basis through December 2009 (or longer if the Federal Reserve chooses to extend TALF). Each TALF loan will have a term of three years, will be for an amount no less than $10 million, will be limited-recourse to the eligible borrower, and will be fully secured by the “eligible collateral.”

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