Alert August 18, 2009

FRB and Treasury Announce Extension to Term Asset-Backed Securities Loan Facility

The FRB and the Treasury have announced the extension of the Term Asset-Backed Securities Loan Facility (the “TALF”).  For more on the TALF, please see the May 5, 2009 Alert.  The FRB and the Treasury approved extending TALF loans against newly issued asset-backed securities and legacy commercial mortgage-backed securities (“CMBS”) through March 31, 2010.  Because new CMBS deals can take a significant amount of time to arrange, the FRB and the Treasury approved TALF lending against newly issued CMBS through June 30, 2010.  The FRB stated that it will continue to monitor financial conditions and will consider in the future whether unusual and exigent circumstances warrant a further extension of the TALF to help promote financial stability and economic growth.  The FRB and the Treasury also announced that they are holding in abeyance any further expansion in the types of collateral eligible for the TALF.