bob
Faculty (Undercover)
- Joined
- 6/7/06
- Messages
- 288
- Points
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Very interesting program announced today. Here is a Bloomberg article that gives the outlines. Attached is the Fed's own doc describing the deal.
Fed will lend for one year at a rate determined by auction to the holders of Aaa-rated tranches of new issuance in auto loans, credit card receivables, and student loans. Although the program is open to everyone, presumably the holders of these tranches are in most cases the originators of the debt.
The securities will be put into an SIV (don't call it a cash CDO, please), funded by Treasury (junior, up to $20b) and the Fed (senior), with all cash flows generated by the securities going first to retire the debt.
So the fun question here is, assuming you're looking to do some new issuance in these asset classes, how do you structure the deal?
Fed will lend for one year at a rate determined by auction to the holders of Aaa-rated tranches of new issuance in auto loans, credit card receivables, and student loans. Although the program is open to everyone, presumably the holders of these tranches are in most cases the originators of the debt.
The securities will be put into an SIV (don't call it a cash CDO, please), funded by Treasury (junior, up to $20b) and the Fed (senior), with all cash flows generated by the securities going first to retire the debt.
So the fun question here is, assuming you're looking to do some new issuance in these asset classes, how do you structure the deal?