Can a borrower under a floorplan loan or a lessee under a fleet lease that backs an ABS, or an affiliate of such a borrower or lessee, borrow from the TALF and pledge the same ABS as collateral?
An ABS will not be eligible collateral for a particular borrower if the borrower is, or is an affiliate of, an obligor under a floorplan loan or a fleet lease backing the ABS, unless that loan or lease, and each other loan or lease in the ABS pool made to the borrower or its affiliate, together constitute no more than 10% of the aggregate principal balance of all of the loans or leases in the pool as of the subscription date. For purposes of this requirement, the definition of “affiliate” shall be as set forth in the MLSA. In the case of leases, the term “aggregate principal balance” refers to the securitization value of the leases in the pool.
Related Questions
- Can a borrower under a floorplan loan or a lessee under a fleet lease that backs an ABS, or an affiliate of such a borrower or lessee, borrow from the TALF and pledge the same ABS as collateral?
- Can a borrower under a commercial mortgage loan that backs a CMBS, or an affiliate of such a borrower, borrow from the TALF and pledge the same CMBS as collateral?
- If a TALF-financed ABS incurs a principal loss, would the loss be allocated between the borrower’s haircut and the TALF loan?
