TALF Epic Fail

[Slimprofits]

Lack of traction in the TALF is certainly not helping boost sentiment that the Treasury’s other legacy asset purchase plans will work any better. The Fed released the latest results of the monthly TALF allocations Tuesday evening, and the outcome managed to be far worse than the already disappointing initial numbers in March. Only $1.7 billion in TALF loans will be made this month after the weak $4.7 billion in loans that started the program’s monthly distributions in March. At the current average rate of monthly loans over these two months, it would take 26 years to reach the $1 trillion goal for the program. It’s probably too soon to call this program a failure, but it won’t be too long if demand doesn’t start to greatly accelerate in coming months. Perhaps the program will begin to gain some traction when the range of assets covered expands as part of the Treasury’s legacy securities purchase program, with hopes in particular that the coming expansion to include CMBS will prove more interesting to investors than the current focus on consumer ABS. It’s possible that investor disinterest could prove more protracted, however. It was noted in the FOMC minutes that some Fed officials “saw a risk that private firms might be reluctant to borrow from the TALF out of concern about potential future changes in government policies that could affect TALF borrowers.”

http://www.wisdomfinancialinc.com/bl...ome_update.php

[FRED]

Re: TALF Epic Fail

Lack of traction in the TALF is certainly not helping boost sentiment that the Treasury’s other legacy asset purchase plans will work any better. The Fed released the latest results of the monthly TALF allocations Tuesday evening, and the outcome managed to be far worse than the already disappointing initial numbers in March. Only $1.7 billion in TALF loans will be made this month after the weak $4.7 billion in loans that started the program’s monthly distributions in March. At the current average rate of monthly loans over these two months, it would take 26 years to reach the $1 trillion goal for the program. It’s probably too soon to call this program a failure, but it won’t be too long if demand doesn’t start to greatly accelerate in coming months. Perhaps the program will begin to gain some traction when the range of assets covered expands as part of the Treasury’s legacy securities purchase program, with hopes in particular that the coming expansion to include CMBS will prove more interesting to investors than the current focus on consumer ABS. It’s possible that investor disinterest could prove more protracted, however. It was noted in the FOMC minutes that some Fed officials “saw a risk that private firms might be reluctant to borrow from the TALF out of concern about potential future changes in government policies that could affect TALF borrowers.”

http://www.wisdomfinancialinc.com/bl...ome_update.php

Remember the Money Market Investor Funding Facility?

[pwcmba]

Re: TALF Epic Fail

http://online.wsj.com/article/SB123914790506498993.html

Trying to expand and install permanent inflation?

[Slimprofits]

Re: TALF Epic Fail

The third round of funding from the Federal Reserve's Term Asset-Backed Securities Loan Facility is shaping up as the largest yet.

As much as $10 billion of securitizations are in the works for the program's May installment, headlined by a $3.6 billion student-loan deal from Sallie Mae. Also in the queue are auto-loan issues of $1 billion from Toyota and $500 million from Honda, along with an auto-lease transaction from PHH Vehicle Management.

Among credit-card deals, J.P. Morgan is planning a $1 billion offering and GE Capital is working on an issue of undetermined size. Motorcycle manufacturer Harley-Davidson also intends to be in the market. So do Caterpillar and John Deere, following through on previously discussed plans.

Early indications are that the issues will price by May 7, with the Fed doling out TALF loans to buyers on or around May 14.

https://www.abalert.com/headlines.php?hid=28931




According to BusinessWeek & Asset-Backed Alert, so far this year banks and other financial firms have sold $16 billion in asset-backed securities. The total in 2008 was $152 billion, down from a high of $906 billion in 2006.

http://www.businessweek.com/magazine...e+channel_news

[Slimprofits]

Re: TALF Epic Fail

http://www.abalert.com/headlines.php?hid=45743

05/15/2009

Structured-product issuers are lining up an estimated $15 billion to $20 billion of deals for the next monthly installment in the Federal Reserve's Term Asset-Backed Securities Loan Facility.

The offerings, scheduled to price on or just before June 2, would represent the largest wave of deals to emerge from the program so far - topping the $13.6 billion of issues that came to market during the first week of this month.

The issuers in the queue include Capital One, which is contemplating a credit-card securitization in excess of $1 billion. Such an offering would mark a reversal of sorts for the lender, which was thought to be avoiding TALF while funding its receivables through deposits.

Other first-time TALF users are likely to include Regions Financial, with an auto-loan issue. Meanwhile, GE Capital has been cited as a repeat issuer after completing a $1 billion sale of TALF-qualified credit-card bonds this month. Its next deal, however, would be backed by floorplan loans to dealers of boats and recreational vehicles.

A number of the June offerings are likely to come from companies that were planning to sell TALF-compliant bonds in the program's previous rounds, but didn't follow through for various reasons. They include PHH Vehicle Management, with a deal backed by leases on fleets of cars and trucks, and Fifth Third Bank, with an auto-loan offering. Both of those transactions were initially scheduled for TALF's May round.

I enjoyed how this little nugget was buried as the very last sentence in the article:

Of the bonds sold in the program's May round, slightly more than $10 billion were pledged as collateral for government loans.

$10 billion of the $13.6 billion pledge collateral in the May round of TALF were for government loans!

*****

ABA Alert also has worldwide securitization volume as of 03/31/2009 at this link:

http://www.abalert.com/ranking.php?rid=1800

So worldwide volume is up 24% in 2009 over 2008.

Every non-U.S. govt category of issuance (?) is down accept for Worldwide CDO, up 33.4% and these two:

Non-U.S. Govt. Swap ABS and MBS issuance is up 284.5% and Non-U.S. Govt. Swap CMBS is up 1,553%.

I was hoping someone might explain what Non-U.S. Govt. Swap CMBS is and why it is listed separately from U.S. Commercial MBS.

[Slimprofits]

Re: TALF Epic Fail

http://dealbook.blogs.nytimes.com/20...s-some-uneasy/

Since March, when the Fed stepped in to fill the lending vacuum left by banks and Wall Street firms, officials have been dragged into murky battles over the creditworthiness of narrow-bore industries like motor homes, rental cars, snowmobiles, recreational boats and farm equipment — far removed from the central bank’s expertise.

[..]

While the Fed so far has denied Hertz’s requests to relax loan terms, some of the lobbying appears to have worked. In March, the Fed announced that it would purchase loans used to buy light trucks and recreational vehicles. It also said that it would finance equipment leasing deals, rental car fleets and “floor plan” loans, which car and R.V. dealers use to finance showroom vehicles.

On May 17, the Fed refined its rules even more, saying that “recreational vehicles” included not just motor homes and campers but also boats, motorcycles and snowmobiles.

Fed officials said they had always intended to include those vehicles because they had long been financed through asset-backed securities of the type the loan facility was created to preserve. And the series of expansions, they said, did not reflect a capitulation to industry pleas. Rather, they simply announced additional details as policy decisions were reached.

Almost inevitably, industry groups are grumbling that the Fed’s terms favor some, like consumer car loans and credit card debt.

Mathew Dunn, a lobbyist for the National Marine Manufacturers Association, said collateral requirements for loans to recreational boat dealers are higher than those for securities backed by car loans.

That may soon change. In late May, the Small Business Administration said that it would open one of its main lending programs to R.V. dealers. Because the Fed has already agreed to finance S.B.A. loans, it may not be long before it is financing boats, snowmobiles, motorcycles and campers.

Obama adminstration, the Fed and Congressmen from both parties still pushing that debt crack.

[Slimprofits]

Re: TALF Epic Fail

Fed Gets No Requests for TALF Loans to Purchase CMBS

http://www.bloomberg.com/apps/news?p...d=amc0bcqnHots

The New York Fed announced the absence of loan requests on its Web site today, the first monthly deadline for investors to apply for loans to buy new CMBS through the Term Asset-Backed Securities Loan Facility, or TALF. No issuers have publicly announced debt that’s eligible for the program.