A Federal Reserve program to spur commercial real estate lending may
provide a bit of a jolt, but the amount of financing will likely be
limited because the infrastructure needed to produce commercial
mortgage-backed securities in bulk is still broken. The Fed threw a
lifeline to the battered commercial real estate sector in June by
opening up its consumer and business lending program, the Term
Asset-Backed Securities Loan Facility (TALF), to commercial mortgage
backed securities (CMBS).
Through the TALF program, investors who buy newly issued CMBS can borrow
directly from the Fed. Investors in existing CMBS can also borrow under
the program. While there has been some participation for existing CMBS,
there have been no new commercial mortgage bonds available for the
program as it takes months to structure new CMBS.
Source: Reuters
provide a bit of a jolt, but the amount of financing will likely be
limited because the infrastructure needed to produce commercial
mortgage-backed securities in bulk is still broken. The Fed threw a
lifeline to the battered commercial real estate sector in June by
opening up its consumer and business lending program, the Term
Asset-Backed Securities Loan Facility (TALF), to commercial mortgage
backed securities (CMBS).
Through the TALF program, investors who buy newly issued CMBS can borrow
directly from the Fed. Investors in existing CMBS can also borrow under
the program. While there has been some participation for existing CMBS,
there have been no new commercial mortgage bonds available for the
program as it takes months to structure new CMBS.
Source: Reuters
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