The Federal Reserve Board expanded the scope and duration of the Municipal Liquidity Facility. The facility, which was announced on April 9, will offer up to $500 billion in lending to states and municipalities.
The revised facility will purchase up to $500 billion in short-term notes issued by U.S. states and the District of Columbia, U.S. counties with populations of at least 500,000 residents, and U.S. cities with a population of at least 250,000 residents.
To be eligible for the facility, notes must mature no later than 36 months from the date of issuance—an increase from the previously announced 24-month maximum term.
The Fed said the updates will allow substantially more entities to borrow directly from the MLF than the initial plan announced on April 9.