Is the amount of net carry diverted to early TALF loan repayment calculated on a cumulative or periodic basis?
The amount of net carry to be applied towards early TALF loan repayment is determined on the same periodic basis as is used to determine net carry and is independent of whether any net carry has been diverted to principal repayments previously for the loan. Since the net carry limit declines in years four and five for five year loans, in some cases, net carry for five year loans may only be diverted in years four and/or five. Example A 5 year TALF loan is issued to an investor with an original haircut of $1,000,000.
Related Questions
- Are the thresholds beyond which net carry is diverted toward early TALF repayment calculated using original or current haircut amount?
- Is the amount of net carry diverted to early TALF loan repayment calculated on a cumulative or periodic basis?
- On what periodic basis is net carry on a TALF loan determined?
