On April 9, 2020, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) released guidelines on seven leveraged credit facilities pursuant to Section 13(3) of the Federal Reserve Act that have the potential to provide nearly $2.3 trillion in loans to US households, businesses, cities, and states. All the credit facilities are currently scheduled to terminate on September 30, 2020, although the termination date can be extended by the Federal Reserve or the Treasury.
The facilities are a combination of those that have previously been announced by the Federal Reserve, but that have been modified in certain respects, and facilities for which the Federal Reserve is unveiling details for the first time. All, however, have been expanded in scope, including through additional equity infusions by the Treasury that allow the Federal Reserve to leverage the facilities to a greater scale.
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