Term Asset-Backed Securities Loan Facility

The Term Asset-Backed Securities Loan Facility (TALF) is designed to help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration (SBA). Eligible borrowers must use a primary dealer, which will act as agent for the borrower, to access the TALF and must deliver eligible collateral to the New York Fed’s custodian bank.

Operation Announcement
Operation Dates: March 17-19, 2009
Settlement Date: March 25, 2009
Maturity Date: March 26, 2012
Facility Open: March 17, 2009, 10:00 a.m. ET
Facility Closed: March 19, 2009, 5:00 p.m. ET
Administrative Fee: 5.00 basis points
Eligible Collateral: ABS1
Term: 3 years
Rates will be set at 12:00 p.m. on March 19, 2009.
Haircuts:

ABS Average Life (years)

Sector

Subsector

0-1

>1-2

>2-3

>3-4

>4-5

>5-6

>6-7

Auto

Prime retail lease

10%

11%

12%

13%

14%

Auto

Prime retail loan

6%

7%

8%

9%

10%

Auto

Subprime retail loan

9%

10%

11%

12%

13%

Auto

Floorplan

12%

13%

14%

15%

16%

Auto

RV/motorcycle

7%

8%

9%

10%

11%

Credit Card

Prime

5%

5%

6%

7%

8%

Credit Card

Subprime

6%

7%

8%

9%

10%

Student Loan

Private

8%

9%

10%

11%

12%

13%

14%

Student Loan

Gov’t guaranteed

5%

5%

5%

5%

5%

6%

6%

Small Business

SBA loans

5%

5%

5%

5%

5%

6%

6%


For ABS benefitting from a substantial government guarantee with average lives beyond five years, haircuts will increase by one percentage point for every two additional years of average life beyond five years. For all other ABS with average lives beyond five years, haircuts will increase by one percentage point for each additional year of average life beyond five years.


Rates:

Sector

Subsector

Fixed

Floating

Auto

3-year LIBOR swap rate
+ 100 bps

1-month LIBOR
+ 100 bps

Bank/Retail Card

3-year LIBOR swap rate
+ 100 bps

1-month LIBOR
+ 100 bps

Student Loan

Private

NA

1-month LIBOR
+ 100 bps

Student Loan

Gov't guaranteed

NA

1-month LIBOR
+ 50 bps

Small Business

SBA loans 7(a)

NA

Fed Funds Target
+ 75 bps

Small Business

SBA loans 504

3-year LIBOR swap rate
+ 50 bps

NA


1
As defined in the terms & conditions