TALF revisions to clear warehouses but lack of broader CLO support disappoints

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By Paola Aurisicchio
14 May 2020

The Federal Reserve this week revised its Term Asset Backed Securities Loan Facility (TALF) to include a broader pool of leveraged loans eligible as collateral, a move that will clear the backup in warehouses but likely will not do much to reinvigorate the market.

The Fed will accept static CLOs backed by leveraged loans priced since January 1, 2019, with the effect of freeing up $15bn-$20bn of collateral sitting in warehouses, according to Wells Fargo estimates.

Some observers see a remarkable change in the latest measure, which vastly expands the universe of ...

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