April 6, 2009 / Law Alert

Investment Opportunity: TALF Loans and PPIP Federal Reserve/Treasury Offers Favorable Loans to Buy Asset-Backed Securities

Recent programs implemented by the Federal Reserve and the Department of Treasury may offer significant investment opportunities for hedge funds, private equity funds, pension plans, insurance companies, other long-term investors, and individual investors. One lending program known as Term Asset-Backed Securities Loan Facility (TALF) is already in place and offers $10 million non-recourse loans to borrowers to buy asset-backed securities. Additionally, the Legacy Loans Program will allow investors to buy pools of loans directly from banks, and the Legacy Securities Program will allow investors to invest with the Department of Treasury in funds that will buy asset-backed securities. All of the programs are designed to provide incentives to investors to once again participate in asset-backed securities markets.