Fed Reduces Pricing 50 Basis Points for its Municipal Liquidity Facility

The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes.

• "Today's changes will ensure the MLF continues to provide an effective backstop to assist U.S. states and local governments as they weather the pandemic," the Fed says in a statement.
• The MLF offers up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic. The state of Illinois is the only entity to tap the facility thus far, receiving a $1.2 billion loan. The facility will cease operating on December 31.
• New pricing for the muni facility: