On May 12, 2020, the Federal Reserve Bank of New York (the "Fed") issued new Frequently Asked Questions and a revised term sheet in connection with the Term Asset-Backed Securities Loan Facility ("TALF 2020"). This Legal Update summarizes the FAQs and the revised term sheet, highlighting key changes and noting where further information or materials may be forthcoming from the Fed.

Key Highlights:

  • The revised term sheet and FAQs clarified that investment funds may be eligible borrowers;
  • The Fed will provide monthly public disclosures identifying TALF borrowers, their "Material Investors" (i.e., any direct or indirect owner of 10% or more of any outstanding class of securities of such borrowers), amounts borrowed, interest rates and other information;
  • TALF borrowers must certify that they are unable to secure adequate credit accommodations from other banking institutions;
  • No new asset classes have been added; the FAQs include detailed requirements for CLOs, CMBS and other eligible assets;
  • Only S&P, Moody's and Fitch are eligible rating agencies under TALF 2020;
  • Collateral review, issuer certifications, auditor assurances and SBA loan documentation have not yet been detailed; and
  • The operational starting date for TALF 2020 has not yet been announced, and a form of the Master Loan and Security Agreement has not been provided.

Downloads - Download Document

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.