The Federal Reserve announced two new interest rates applicable to loans extended under the Term Asset-Backed Securities Loan Facility. The rates apply to certain loans secured by asset-backed securities with weighted average lives to maturity of less than two years. The new rates will be based on one- and two-year Libor swap rates.
The new rates will take effect for the May TALF funding. The new interest rates apply to fixed-rate TALF loans secured by ABS that do not benefit from a government guarantee.