Bank Of America Selling Auto Loan Bonds

September 8, 2009

In a recent announcement, the Bank of America Corporation has said that it plans to sell those bonds that are backed by auto loans and eligible for a special program offered by the Federal Reserve that would reinvigorate weak lending markets.

The new deal is still in the developmental stage, with many of the terms under consideration by Bank of America executives and other parties privy to the development of the program.

According to the latest reports, a deadline has been set for September 3 for interested investors to put in their requests to purchase asset-backed debt as part of the Federal Reserve’s latest distribution of its touted Term Asset-Backed Securities Loan Facility or TALF.

Insiders have stated that the Federal Reserve is relying on the TALF program to reduce the overall costs for borrowing and remove the restrictions that are currently block the flow of credit to consumer sand small businesses across the country.

The program has as much as $200 billion in loans available to finance the purchase of asset-backed securities that are a big part of new consumer and small businesses financing loans.

The Federal Reserve is hoping that this latest measure does the trick and provides the incentive needed for continuing the long journey to economic recovery and the revival of the country’s important credit markets.

U.S. consumers and small businesses alike are holding their collective breath regarding the reissue of the TALF program. Bank of America represents just one substantial interest in the development and success of the Federal Reserve program. The sales of bonds backed by auto loans are just one of a several proposed asset-backed securities deals that are in the works.

The line of investors includes a number of big companies as well as individuals seeking to play a small part in getting the United States economy going strong again.