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CMBS TALF: Uncertain Expectations

On May 1, 2009, the Federal Reserve Board (FRB) and Federal Reserve Bank of New York (FRBNY) announced terms and conditions for extension of the Term Asset-Backed Securities Loan Facility (TALF) to commercial mortgage-backed pass-through securities (CMBS). While inclusion of CMBS under TALF was expected following the U.S. Treasury Departments March 23, 2009 announcement of the Public-Private Investment Program (PPIP), how CMBS would be incorporated into TALF was uncertain. Consistent with the TALF rollout thus far, the FRB is approaching this new expansion conservatively and deliberately. As such, the willingness of the market to participate under these terms remains to be seen.

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