Term Asset-Backed Securities Loan Facility: CMBS - FEDERAL RESERVE BANK of NEW YORK

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Term Asset-Backed Securities Loan Facility: CMBS



The Federal Reserve created the Term Asset-Backed Securities Loan Facility (TALF), to help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by auto loans, student loans, credit card loans, equipment loans, floorplan loans, insurance premium finance loans, loans guaranteed by the Small Business Administration, residential mortgage servicing advances, or commercial mortgage loans. Eligible borrowers must use a primary dealer, which will act as agent for the borrower, to access the TALF and must deliver eligible collateral to the New York Fed’s custodian bank. The following operations announcement pertains to new issue and legacy commercial mortgage-backed securities:


Operation Announcement



Subscription Date:		August 20, 2009

Closing Date:		August 28, 2009

3-Year Maturity Date:		August 28, 2012

5-Year Maturity Date:		August 28, 2014

Facility Open:		August 20, 2009 8:00 a.m. ET

Facility Close:		August 20, 2009 3:00 p.m. ET

Administrative Fee:		20.00 basis points

Eligible Collateral:		CMBS¹

Loan Term:		3 or 5 years

Rates will be set at 12:00 p.m. ET on August 19, 2009

Haircuts:

	CMBS Average Life (years)
Sector	0-5
Commercial Mortgage	15%

For newly issued CMBS with average lives beyond five years, collateral haircuts will increase by one percentage point for each additional year (or portion thereof) of average life beyond five years. For legacy CMBS with average lives beyond five years, base dollar haircuts will increase by one percentage point of par for each additional year (or portion thereof) of average life beyond five years. No CMBS may have an average life beyond ten years.

Rates:

Sector	Fixed 3 year loan (Average Life, in Years)	Fixed 5 year loan
Commercial Mortgage	3-year LIBOR swap rate + 100 bps	5-year LIBOR swap rate + 100 bps

¹As defined in the terms & conditions

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