CalHFA Exits Treasury's Credit Liquidity Program Early

The California Housing Finance Agency has ended its use of a U.S. Treasury liquidity program that the agency had relied on since 2009.

CalHFA in Sacramento said it initially tapped $3.5 billion from the Temporary Credit Liquidity Program. CalHFA has gradually reduced its exposure to the program and finalized its exit by replacing $510 million from the Treasury with letters of credit from four private banks.

"The retirement of the TCLP obligation…demonstrates that private banks will again extend us credit," Tia Boatman Patterson, CalHFA's executive director, said in a news release.

CalHFA did not identify the banks that provided the letters of credit.

Treasury is scheduled to end the liquidity program on Dec. 23. CalHFA was able to reduce its reliance on the program ahead of schedule by refinancing variable-rate bonds with fixed-rate bonds, and by using cash to reduce variable-rate bonds.