Federal Reserve COVID-19 Response: Federal Reserve Announces Creation of New, and Expansion of Existing, Lending Facilities and Other Actions to Support Economy in Response to COVID-19

Sullivan & Cromwell LLP - March 24, 2020
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On March 23, 2020, the Board of Governors of the Federal Reserve System (the “Board”) announced the creation of an unprecedented a suite of new lending facilities intended to provide support for the flow of credit to U.S. families and businesses in response to the financial disruptions caused by COVID-19.  These facilities include the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility and the Term Asset-Backed Securities Loan Facility. Additionally, the Board announced expansions to its previously announced Money Market Mutual Fund Liquidity Facility and Commercial Paper Funding Facility. The Board had previously announced its establishment of a Primary Dealer Credit Facility. This memorandum summarizes the operational details and terms of the six lending facilities as they exist as of the date of publication.

This memorandum also summarizes the terms of the Federal Reserve’s recently issued letters to certain banks temporarily exempting the recipient banks from Section 23A of the Federal Reserve Act and Regulation W for certain asset purchases by the bank from its affiliated money market mutual funds or affiliated broker dealers.