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THE BOND BUYER: Fed Report shows MLF worked as a backstop

March 09, 2021

Despite its limited use, the Municipal Liquidity Facility bolstered eligible local governments by reducing the likelihood of credit downgrades, raising the price on trades in the secondary market and saving local government jobs. "The evidence is that the MLF did serve its purpose," said Brian Battle, director of trading at Performance Trust Capital Partners LLC. "It did help highly distressed issuers, but it's hard statistically to prove a negative. I'm not surprised by the result of the report."

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