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Market Pushes To Get CLOs Under TALF March 13, 2009

-- Kristen Haunss

The Loan Syndications and Trading Association and various banks are said to be talking to the federal government about opening up the Term Asset-Backed Securities Loan Facility program, or another government program, to triple-A tranches of collateralized loan obligations. Currently the fund, what market players are calling TALF 1.0, can only be used for asset-backed securities backed by newly and recently originated auto loans, credit cards, student loans and SBA-guaranteed small business loans. A Federal Reserve spokesman did not return a call.

The banks and the LSTA are asking the government to allow investors to pledge triple-A tranches of CLOs for TALF 2.0, the next version of TALF. There are currently 15 different asset classes ...

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