May 22, 2020

TALF 2020: Key Considerations for Private Funds and Registered Investment Companies


This week, the Federal Reserve Bank of New York (the “NY Fed”) announced that June 17, 2020 would be the start date for loan subscriptions under the Term Asset-Backed Securities Loan Facility (“TALF” or “TALF 2020”). The TALF 2020 program will provide non-recourse financing to qualifying purchasers (“eligible borrowers”) of qualifying ABS (“eligible collateral”) backed by credit exposures to US businesses and consumers. For prior Milbank client alerts regarding TALF, see our client alerts of April 9, 2020 and May 12, 2020.

Investment funds – private funds and registered investment companies – were among the major users of the original TALF program (“TALF 2009”) launched during the 2008-9 financial crisis. When TALF 2020 was first announced, however, it was unclear whether investment funds would be permitted to use it. The initial term sheet omitted investment funds – which had explicitly been included as eligible borrowers under TALF 2009 – from the “eligible borrower” definition, and the revision that followed, which added the requirement that an eligible borrower be a “business that … has significant operations in and a majority of its employees based in the United States,” appeared to confirm that only operating companies would be permitted to access TALF. The most recent updates, however, make clear that an investment fund, “including without limitation a hedge fund, a private equity fund, and a mutual fund,” as well as a single-investor fund, is eligible to borrow under TALF 2020 provided it meets the requirements of the program.

Click here to read the full client alert: TALF 2020: Key Considerations for Private Funds and Registered Investment Companies.

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