Term Asset-backed Securities Loan Facility (“TALF”) Funds Resources

Any companies that can form a U.S.-based subsidiary or have a U.S.-based fund manager and have undeployed capital or are able to raise funds quickly should consider raising a TALF fund, especially if they are active in the credit space (originators or investors). Clients that historically invest only in equities, or in private equity, have asked about forming new TALF funds. Any U.S. entity can be an eligible borrower, but many participants are structured as investment funds.

Dechert lawyers are advising many clients on the formation of new private investment funds that seek to raise money from investors to take advantage of the TALF program and invest in the collateral eligible for the program. However, the nature of the program could create additional opportunities for companies, and our firm has the breadth and depth to also advise:

• ABS issuers on creating collateral that will be eligible for TALF loans.
• Investment banks and TALF agents on compliance procedures for onboarding borrowers.
  
• Funds, TALF agents and borrowers on the customer agreements required to take advantage of TALF.
  
• Managers on forming ERISA-compliant, tax efficient and EU securitisation regulation-compliant fund vehicles.
  

Registered funds and BDCs can also participate in TALF 2.0, either directly or indirectly. On May 27, 2020, the SEC staff reaffirmed and extended guidance permitting registered funds to acquire TALF-eligible assets either directly, based on complying with the conditions of the 2009 Franklin Templeton no-action letter, or indirectly through a pooled investment vehicle, based on complying with the conditions of the 2009 T. Rowe Price no-action letter.