According to the Federal Reserve, the objective of this expansion is to create liquidity and help determine accurate prices for Legacy CMBS securities and, by doing so, stimulate the expansion of new credit and ease balance sheet pressures on banks and other institutions holding Legacy CMBS securities.
To be eligible as collateral for TALF loans, the Legacy CMBS must meet the following criteria:
The general terms and conditions of the TALF program apply to TALF loans that are secured by Legacy CMBS, with the following modifications:
The FRBNY may limit the volume of TALF loans secured by Legacy CMBS and is considering whether to allocate this volume via auction or other procedure. The FRBNY is also in the process of establishing other requirements that will apply to Legacy CMBS.
For a complete term sheet for the expansion of the TALF to Legacy CMBS, please visit http://newyorkfed.org/markets/talf_cmbs_terms.html.
This Client Alert is prepared for the general information of our clients and other interested persons. This Client Alert is not, and is not intended to be, comprehensive in nature. Due to the general nature of its content, this Client Alert is not and should not be regarded as legal advice.
Klehr Harrison has represented borrowers in several TALF transactions and, as part of that representation, has worked through issues with several of the principal banks that act as “dealers” on behalf of the New York Federal Reserve. If you are interested in determining how you could participate in TALF, or if you have any questions about the TALF program, please contact any of the persons listed below:
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