Congressmen say TALF falls short on floorplanning

Author:
Updated:
Original:

Several members of Congress sent a letter to Federal Reserve Chairman Ben Bernanke last week expressing concern with elements of the Term Asset-Backed Securities Lending Facility that could be deterring participation for non-auto floorplan asset-backed securities.

In March, non-auto floorplans were included as an eligible asset class in TALF. However, there has been no issuance of non-auto ABS to date largely because of the comparatively high "haircut levels" for non-auto ABS, according to the letter.

A "haircut" is the percentage amount deducted from the market value of the ABS to account for the risk of loss that the investment poses. The letter encourages the Treasury and the Fed to re-examine the haircut levels for non-auto ABS in order to increase liquidity in the marine industry.

"Access to credit and reasonably priced capital remain difficult for U.S. marine dealerships and manufacturers despite all recent recovery efforts," stated U.S. Rep. Pete Hoekstra, R-Mich., one of the members of Congress signing the letter. "Many lenders have left the market completely, causing job losses and an erosion of the marine industry."

Thom Dammrich, president of the National Marine Manufacturers Association, praised the bipartisan effort to increase liquidity in the secondary markets for dealer floorplan loans, calling it an "extremely critical issue" for the boating industry.

"We hope that Treasury Department and Fed officials recognize that the current haircut levels are discouraging investor and lender participation in this vital program," he said in a statement.

To read the full letter, click here.

Related

NMMA to Hold State of the Industry Webinar

The March 4 webinar takes place at 11 a.m. and includes the presentation of the Marine Industry Customer Satisfaction Index Awards and the Alan J. Freedman Award.

Sanlorenzo Reports 2020 Financials

Gains in the Asia-Pacific and Americas markets offset losses for the Italian builder’s superyacht division.

Into the High Season

Our monthly Pulse Report survey asks dealers about restocking inventory and more, as the new season looms.

It Takes Two to Tango

The boom in boat sales we’re enjoying is a result of the combined efforts of the National Marine Manufacturers Association and the Recreational Boating and Fishing Foundation.

Besenzoni - for over 50 years ambassador of made in Italy in the world - designs and produces accessories for pleasure and commercial boating characterized by simple and functional design

Besenzoni constantly assists its customers in 90 countries with 187 representative points and a direct assistance network consisting of 164 operating units around the world coordinated by the headquarters.

Sea Tow Saves Cold-Stunned Turtles

Its Corpus Christi outfit is rescuing turtles that were affected by the deep freeze in Texas.