Term Asset-Backed Securities Loan Facility: Operations

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

Subscription Date:

June 2, 2009

Closing Date:

June 9, 2009

3-Year Maturity Date:

June 11, 2012

5-Year Maturity Date:

June 9, 2014

Facility Open:

June 2, 2009 1:00 p.m. ET

Facility Close:

June 2, 2009 3:00 p.m. ET

Administrative Fee:

5.00 basis points

Eligible Collateral:

ABS¹

Loan Term:

3 or 5 years

Rates will be set at 12:00 p.m. on June 2, 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	Motorcycle/other recreational vehicles	7%	8%	9%	10%	11%
Auto	Commercial and government fleets	9%	10%	11%	12%	13%
Auto	Rental fleets	12%	13%	14%	15%	16%
Credit Card	Prime	5%	5%	6%	7%	8%
Credit Card	Subprime	6%	7%	8%	9%	10%
Equipment	Loans and leases	5%	6%	7%	8%	9%
Floorplan	Auto	12%	13%	14%	15%	16%
Floorplan	Non-auto	11%	12%	13%	14%	15%
Premium Finance	Property and casualty	5%	6%	7%	8%	9%
Servicing Advances	Residential mortgage	12%	13%	14%	15%	16%
Small Business	SBA loans	5%	5%	5%	5%	5%	6%	6%
Student Loan	Private	8%	9%	10%	11%	12%	13%	14%
Student Loan	Gov't guaranteed	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 - 3 Year (Weighted Average Life in years)			Fixed - 5 Year	Floating
Sector	Subsector	<1	1-<2	>=2	Fixed - 5 Year	Floating
Auto		1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Credit Card		1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Equipment		1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Floorplan		1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Premium Finance	Property and Casualty	1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Servicing Advances	Residential mortgages	1-year LIBOR swap rate + 100 bps	2-year LIBOR swap rate + 100 bps	3-year LIBOR swap rate + 100 bps	NA	1-month LIBOR + 100 bps
Small Business	SBA loans 7(a)	N/A	N/A	N/A	NA	Fed Funds Target + 75 bps
Small Business	SBA loans 504	N/A	N/A	3-year LIBOR swap rate + 50 bps	5-year LIBOR swap rate + 50 bps	N/A
Student Loan	Private	N/A	N/A	N/A	NA	1-month LIBOR + 100 bps
Student Loan	Gov’t guaranteed	N/A	N/A	N/A	NA	1-month LIBOR + 50 bps

¹As defined in the terms & conditions

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