If the issuer of an ABS has an option to redeem such ABS prior to the maturity date (other than pursuant to a customary clean-up call), is the ABS eligible to secure a TALF loan?
In rare cases the New York Fed may consider accepting ABS where the issuer has an option to redeem such ABS (other than pursuant to a customary clean-up call) if, in its judgment, the option does not increase risks to the New York Fed and the ABS otherwise meets the collateral eligibility criteria. No borrower may pledge ABS with a redemption option (other than pursuant to a customary clean-up call) unless, based on its review of the applicable prospectuses/offering documents, the borrower confirms that the ABS issuer has received acceptance of such redemption option from the New York Fed. For these purposes, a “customary clean-up call” with respect to a sponsor and its securitization refers to the clean-up call which is exercisable by the servicer or the depositor when the remaining balance of the assets or the liabilities of the issuer is not more than 10% (or a higher percentage customarily used by the sponsor in its securitizations that were offered before the TALF program was esta
Related Questions
- In connection with floorplan ABS, may ineligible receivables from a dealer be transferred to the issuer along with the dealer’s eligible receivables for ease of administration by the servicer?
- If the issuer of an ABS has an option to redeem such ABS prior to the maturity date (other than pursuant to a customary clean-up call), is the ABS eligible to secure a TALF loan?
- If the issuer of a ABS has an option to redeem such ABS prior to the maturity date (other than pursuant to a customary clean-up call), is the ABS eligible to secure a TALF loan?
