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Fed Adds Legacy CMBS to TALF Collateral
As part of additional measures to support the economy, totaling as much as $2.3 trillion in liquidity, the Federal Reserve said Thursday that the Term Asset-Backed Securities Loan Facility (TALF) will now include legacy CMBS as eligible collateral.
Eligible CMBS securities must have been issued before March 23 of this year. Single-asset, single-borrower CMBS and commercial real estate CLOs aren’t included in TALF.
“The acceptance of existing CMBS securities is an important step in the recovery of our market and economy as the $4.5-trillion commercial real estate market represents some 18% of GDP, and thus will play an important role in the U.S. recovery from COVID-19,” said Lisa Pendergast, executive director of the CRE Finance Council.
Harking back to the 2008 recession, she added, “We know that TALF 1.0 had an immediate and positive impact on restoring stability to the CMBS market, and that the recovery in the secondary market was imperative in order to restart CMBS lending and issuance.”
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