What interest rates are offered under the TALF?
The loan rate is determined by the type of collateral securing the loan. For TALF loans secured by private student loan ABS bearing a prime-based coupon, the interest rate will be the higher of 1 percent and the rate equal to “Prime Rate” (as defined in the MLSA) minus 175 basis points. For other TALF loans backed by collateral not benefitting from a government guarantee, the interest rate on floating-rate loans will be 100 basis points over 1-month LIBOR. For fixed-rate three-year loans, the interest rate will be 100 basis points over the 1-year LIBOR swap rate for securities with a weighted average life less than one year, 100 basis points over the 2-year LIBOR swap rate for securities with a weighted average life greater than or equal to one year and less than two years, or 100 basis points over the 3-year LIBOR swap rate for securities with a weighted average life of two years or greater. For TALF loans backed by SBA 504 Development Company Participation Certificates and commercial
