TEXT-S&P: Gauging TALF amid ABS issuances, tighter sprds

(The following statement was released by the rating agency)

Aug 11 - In an effort to bring greater transparency and insight to the
market, Standard & Poor's Ratings Services latest Quarterly Term Asset-Backed
Securities Loan Facility (TALF) Report discusses the program's success amid
increasing issuance and tightening spreads in the asset-backed securities (ABS)
market.

"Investors' initial feedback seemed to indicate that market participants
were receptive to the TALF program, as ABS issuance has continued to increase
from its near-frozen state at the beginning of 2009 and spreads in the
secondary market have narrowed," said credit analyst David Hoberman. "We
believe the success of the program has also been somewhat augmented by other
factors, such as investors' increased demand for high credit quality returns
paying interest greater than U.S. Treasuries."

According to the report, the availability of the TALF facility has
increased investors' interest in investing in ABS. This interest, rather than
the actual usage of the facility, ultimately benefits the markets and
consumers, as evidenced by the steep decline in ABS risk premiums. In addition,
the oversubscription of some TALF deals has resulted in increased demand for
trading non-TALF deals in the secondary market. This led to higher prices and
lower yields. These tightened spreads have made securitization a more desirable
capital source for issuers, thereby fostering an increase in ABS issuance. That
said, we believe a reduction in TALF participation and increased issuance in
the cash market points to TALF's success.

In the report, Standard & Poor's also reviewed its rated ABS transactions
that were used as collateral for TALF loans during each of the first six rounds
of TALF funding, including auto loan and lease, credit card, student loan,
equipment, and commercial mortgage-backed securities. The Federal Reserve Bank
of New York recently announced that it will extend many programs that are set
to expire Dec. 31, 2009, until Feb. 1, 2010. The report also discusses the TALF
program's evolving features.

Standard & Poor's Quarterly TALF Report is designed to provide updates and
insights to market participants in light of the TALF program's importance to
the credit markets' recovery, and to the availability of credit to U.S.
consumers and small businesses. In addition, this report tracks the ABS
purchased under the TALF program together with the performance measures for
those securities.

The full report, "Standard & Poor's Quarterly TALF Report: Gauging The
Program's Success Amid Increasing ABS Issuance And Tightening Spreads," was
published Aug. 11, 2009, on RatingsDirect.
RELATED RESEARCH

-- "Standard & Poor's Quarterly TALF Report: Initial Participation
Indicates Investors Are Receptive To The TALF Program," published May 11,
2009.

The reports are available to RatingsDirect subscribers at
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purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail
to research_request@standardandpoors.com. Ratings information can also be found
on Standard & Poor's public Web site at www.standardandpoors.com; under Ratings
in the left navigation bar, select Find a Rating. Members of the media may
request copies of these reports by contacting the media representative
provided.
Primary Credit Analysts:
David Hoberman, FRM, New York (1) 212-438-7323;
david_hoberman@standardandpoors.com
Jay Banerjee, New York (1) 212-438-3792; jay_banerjee@standardandpoors.com
(New York Ratings Team)