The Federal Reserve Bank of New York Expands TALF to Include New Issuances of CMBS

May 04, 2009
The Federal Reserve Bank of New York (the “New York Fed”) expanded the Term Asset-Backed Securities Loan Facility (the “TALF”) on May 1, 2009 to include qualifying commercial mortgage-backed securities (“CMBS”) issued on or after January 1, 2009. Previously, eligible borrowers could obtain TALF non-recourse financing to purchase certain types of AAA-rated asset-backed securities (“ABS”), but CMBS were not eligible for TALF financing. The first TALF subscription date for CMBS will occur in June 2009. While the full details of TALF for CMBS have yet to be finalized, the New York Fed has released some information regarding the program.

This update provides a comprehensive overview of the new TALF program for CMBS, highlighting important criteria the CMBS and underlying mortgage loans must satisfy to be TALF eligible, as well as significant features of the TALF loans themselves. This update also contains a side-by-side comparison of pre-TALF CMBS and TALF-eligible CMBS.