Current Issue
The Federal Reserve Bank of New York received requests for $2.12bn of government loans to purchase legacy commercial mortgage-backed securities (CMBS).
The requests, received Wednesday under the Term Asset-Backed Securities Loan Facility (TALF), mark a revival of CMBS investor interest from the previous facility. The NY Fed in September received requests for $1.4bn of loans to purchase legacy CMBS, down from $2.3bn of requests for he August facility.
The Federal Reserve initiated the TALF program to stimulate lending by allowing private investors to purchase securities with a matching government investment. The reach of the program into legacy CMBS aimed to aid price discovery and provide liquidity for the commercial mortgage market, which faces a credit crisis of its own.
The October 21 CMBS TALF subscription date exceeded researcher estimations from Barclays Capital.
BarCap researchers projected last week the Fed would receive around $2bn of TALF loan requests for the October CMBS facility. The researchers pointed to list activity of $4.8bn since the last CMBS-eligible TALF subscription date and indicated an increase in subscription volume over the previous facility was likely.
Write to Diana Golobay.
