The Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) is now available to non-bank PPP lenders to finance Paycheck Protection Program (“PPP”) loans that they originated or purchased.  While the PPPLF was previously only available to depository institutions to finance PPP loans that they originated, the Federal Reserve revised its eligibility criteria on April 30, 2020 to provide funding to all Small Business Administration (“SBA”) approved lenders.[1]  Terms of the PPPLF are discussed in our earlier blog post.

Continue Reading PPPLF Now Open to Non-Banks and for Purchased PPP Loans

On April 9, 2020, the U.S. Federal Reserve announced revised preliminary terms for the Term Asset-Backed Securities Loan Facility (“TALF 2020”). Certain CLO securities that are rated AAA by at least two rating agencies and are not rated below AAA by any other rating agency will be eligible collateral for loans under this program. In

Yesterday, the Federal Reserve announced additional actions to support the U.S. economy, which included expanding its Term Asset-Backed Securities Loan Facility (“TALF 2020”) to include legacy commercial mortgage-backed securities (CMBS).  According to the updated term sheet that accompanied the Federal Reserve’s April 9, 2020 announcement, eligible collateral for the TALF 2020 program will now include

The Federal Reserve issued a revised term sheet  on April 9, 2020, for the Term Asset-Backed Securities Loan Facility (“TALF 2020”) that was initially announced on March 23, 2020. This Legal Update summarizes the revised terms and conditions applicable to TALF 2020 and updates a Legal Update we previously issued on March 24, 2020.

On Monday, March 23, 2020, in response to the evolving economic crisis created by the COVID-19 epidemic, U.S. Treasury and the Federal Reserve authorized the establishment of two new facilities to support credit for large employers:

  • The Primary Market Corporate Credit Facility (PMCCF) will provide credit for new bond and loan issuance by directly purchasing eligible corporate bonds from investment grade issuers.
  • The Secondary Market Corporate Credit Facility (SMCCF) will provide liquidity for outstanding corporate bonds and eligible exchange-traded funds (ETFs) by buying corporate bonds and ETFs in the secondary market.

The Federal Reserve will use authority granted by Section 13(3) of the Federal Reserve Act to lend to the SPV to support the vehicle’s purchases. The programs were approved by the U.S. Treasury in initial amounts of $10 billion, with funds provided from Treasury’s Exchange Stabilization Fund (ESF). SMCCF and PMCCF were not used during the 2008 financial crisis.


Continue Reading US Treasury and Federal Reserve Announce Two New Corporate Credit Facilities for Large Employers