On July 23, the Federal Reserve Bank of New York (FRBNY) published revised versions of the Master Loan and Security Agreement, Terms and Conditions and FAQs for the Term Asset-Backed Securities Loan Facility (TALF). The changes to the MLSA were generally technical, and clarifications were made that:
- aircraft is not an eligible type of equipment-related receivables;
- potential TALF borrowers may obtain non-TALF interim financing for legacy commercial mortgage-backed securities (CMBS), so long as any such arrangement is terminated at the closing of the TALF loan; and
- potential TALF borrowers who are (a) obligors under a floorplan loan or fleet lease, or their affiliates, or (b) manufacturers or sellers of products, or providers of services, including education and insurance, which are financed by loans or leases, and their affiliates, in each case, may not borrow unless the related loans or leases constitute no more than 10% of the loans and leases backing any ABS to which the TALF loan relates.
In addition, as previously announced, the administrative fee beginning in August for TALF loans for non-mortgage related asset-backed securities (ABS) has been raised from 5 bps to 10 bps.
The FRBNY also announced that the next TALF loan subscription dates for ABS are August 6, September 3 and October 2, and for CMBS are August 20, September 17 and October 21.