May 15, 2020 – The Federal Reserve Bank of New York (“FRNY”) has released a Notice of Interest (NOI) for eligible issuers that may wish to sell notes (up to 3 years maturity) to a SPV set up under the Fed’s Municipal Liquidity Finance (MLF) program.

The Fed is being assisted by BLX Group – a advisory firm affiliated with Orrick, Herrington and Sutcliffe, one of the largest public finance legal firms – in processing the applications.

In a clear effort to manage its internal staffing resources, the FRNY has requested that issuers submit NOIs only once issuers have determined its financial needs and the contemplated financing schedule. The press release noted that the program is not a “first come, first served” program and implied that there will be sufficient lending capacity for all eligible borrowers.

The FRNY also indicated that issuers may submit multiple NOIs as financing needs are known, but caveated that it might “establish a maximum number of issuances per issuer” in the future.

The Federal Reserve statement reiterated the purpose of the MLF program and intended results:

The municipal securities market is an important part of the financial system, which helps provide states, cities, and counties (and their political subdivisions and other governmental entities) with the funding needed to provide essential public services to their citizens.  The COVID-19 pandemic caused a swift and dramatic increase in interest rates on municipal securities, and while some issuers subsequently have been able to issue debt or secure loans, many issuers have not been able to meet their financing needs through the capital markets.  By ensuring the smooth functioning of the municipal securities market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs in communities, large and small, across the nation.

Review the NOI instructions at https://bit.ly/MLFNOI.

Contact Caren Moses at CMoses@buymuni.com.