Thursday, June 4, 2009

Update: TALF Participation Continues to Rise

According to a statement released by the Federal Reserve Bank of New York (the "NY Fed") on Tuesday, June 2nd, prospective borrowers requested approximately $11.5 billion in loans during the June 2nd operation of the Term Asset-Backed Securities Loan Facility ("TALF"). This figure represents a slight increase over the $10.6 billion in loans that were requested at the May 5th facility.

In related news, William C. Dudley, President and CEO of the NY Fed, delivered a speech this morning in which he assessed the early performance and future prospects of the TALF. Mr. Dudley argued that the early evidence indicated that the TALF is functioning as designed, citing an increase in the issuance of consumer asset-backed securities, the fact that TALF loans have accounted for a bit more than half of the total issuance volume of asset-backed securities, and the decline in spreads on consumer asset-backed securities.