The Federal Reserve Board on Tuesday announced revised pricing for its Municipal Liquidity Facility (MLF). The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes.
The MLF was established under Section 13(3) of the Federal Reserve Act through Title IV of the CARES Act, with approval of the Treasury Secretary. It offers up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic. Pricing has been one of the primary challenges for most eligible entities to access the $500B facility; so far only one entity has issued a 24-month facility through the MLF. For more information about the MLF, including eligibility, please click here.
Please click here to see the revised Term Sheet.