Term Asset-Backed Securities Loan Facility The Term Asset-Backed Securities Loan Facility (TALF) is a funding facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA). Under the TALF, the Federal Reserve Bank of New York (FRBNY) will lend up to $200 billion on a non-recourse basis to holders of certain AAA-rated ABS backed by newly and recently originated consumer and small business loans. The FRBNY will lend an amount equal to the market value of the ABS less a haircut and will be secured at all times by the ABS. How will the interest rates on TALF loans be determined? The interest rate on TALF loans will be set with a view to providing borrowers an incentive to purchase newly issued eligible ABS at yield spreads higher than in more normal market conditions but lower than in the highly illiquid market conditions that have prevailed during the recent credit market turmoil. Interest rates will be announced in advance of each monthly loan subscription date. How will the collateral haircuts be set? When will they be publicly available? Haircuts will be determined for each type of eligible ABS based on the riskiness of each type of eligible collateral and the maturity of the eligible collateral pledged to the New York Fed. Haircuts will be announced in advance of each monthly loan subscription date.