How will a borrower know if an ABS is considered prime or subprime?
Issuers will publish in the prospectus whether the deal is prime or subprime according to TALF criteria. If this is not published in the prospectus, the deal will be considered subprime. Such representations in the prospectus are material to the New York Fed’s determination of the haircuts for TALF loans and are considered a component of the representation as to the accuracy of the offering document.
