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Morgan Stanley raises over USD600m for TALF strategy

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Morgan Stanley Investment Management has raised over USD600m from high net worth and institutional investors for a strategy investing primarily in securities eligible to serve as collat

Morgan Stanley Investment Management has raised over USD600m from high net worth and institutional investors for a strategy investing primarily in securities eligible to serve as collateral under the term asset-backed securities loan facility offered by the Federal Reserve Bank of New York.

The USD600m in total capital raised exceeded MSIM’s initial USD500m target.

The Federal Reserve Bank of New York and the US Treasury announced the creation of the USD200bn TALF with the goal to stimulate the consumer and small business lending markets by facilitating issuance of asset-backed securities in October 2008, and later announced the launch of the TALF programme in March 2009.

Randy Takian, head of the Morgan Stanley retail and intermediary business for MSIM, says: ‘We are very pleased to give clients the ability to take advantage of this limited opportunity to invest in TALF eligible securities along with the non-recourse financing being offered through the programme.’

‘Morgan Stanley has been investing in the ABS market since its inception in 1985 and our team has extensive experience conducting security selection and credit work, sourcing collateral and providing industry-wide access to deal flow, and providing ongoing portfolio oversight,’ says Sanjay Verma, lead portfolio manager of MSIM’s TALF strategy. ‘We are proud to participate in a programme designed to facilitate available credit to households and small businesses, while also giving our investors access to a unique opportunity to invest in high quality securities.’

MSIM’s TALF strategy involves capitalizing on market disruptions by sourcing undervalued credits and attractive cash flows inherent in securities eligible to serve as collateral under TALF. The TALF strategy will predominantly invest in auto, credit card, small business and student loans, all of which have an AAA rating from two or more agencies.

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