Reserve Bank outlines details of Term Lending Facility
The Reserve Bank has today outlined the details of the previously announced Term Lending Facility (TLF), which will be available to banks from later this month.
The TLF will support the government’s Business Finance Guarantee Scheme (BFGS) by providing banks access to long-term funding at a low interest rate. From 26 May, the Reserve Bank will offer to lend funds to banks through this facility, with access to funds linked to each banks’ lending under the BFGS.
The TLF will provide funding at a rate of the OCR, fixed for three years. The facility will require approved eligible collateral to be pledged in a similar manner to the Reserve Bank's Open Market Operation (OMO).
The Reserve Bank will make this facility available for eligible counterparties to use on the 18th to 20th business day (inclusive) of each month, for a period of 6 months. The schedule below shows the TLF programme, starting from 26 May to the end date of 29 October.
Requests during the offering will be accepted between 10.00am-12.00pm and between 1.00pm-3.00pm. Settlement will occur on a next business day basis.
In order to match funding from the TLF with loans outstanding under the BFGS, participants may request to terminate any TLF repurchase amount before its maturity date.
In the event that a participant’s total outstanding BFGS loan amount falls below the amount that the participant has outstanding under the TLF, the Reserve Bank may require the early termination of any repurchase transaction (in whole or in part), to the effect that the amount outstanding under the TLF will equal (or be less than) the outstanding BFGS loan amount.
The total volume of funds lent under the TLF will be recorded and published on the Bank’s D10 tables a month later.
The Reserve Bank reserves the right to alter the number of offerings, date, time, and settlement of the facility at its discretion.
Offering 10:00am - 12:00pm and 1:00pm - 3:00pm
- 26 May 2020 – 28 May 2020
- 25 June 2020 – 29 June 2020
- 24 July 2020 – 28 July 2020
- 26 August 2020 – 28 August 2020
- 24 September 2020 – 28 September 2020
- 27 October 2020 – 29 October 2020
For further information contact:
Manager, Financial Markets