WASHINGTON–The Federal Reserve Board said it plans to extend the maturities of loans it makes to holders of asset-backed securities to three years, from the one year initially envisioned.
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In a press release, the Fed said it made the move after consultation with investors, issuers, and dealers in the ABS market. The central bank announced last month that would lend up to $200 billion to holders of certain triple-A-rated ABS.
Credit losses for the program will be covered by a $20-billion allocation from the Troubled Assets Relief Program. The Fed said that it still expects to launch the program in February and quit making these loans on Dec. 31, 2009. So the program is now scheduled to wrap up by year-end 2012.
