TALF gets an extension

WASHINGTON — The Federal Reserve Board and the Treasury Department have approved an extension to the Term Asset-Backed Securities Loan Facility (TALF), the groups reported this week.

TALF loans against newly issued asset-backed securities (ABS) and legacy commercial mortgage-backed securities (CMBS) have been extended through March 31. Lending against newly issued CMBS has been extended through June 30. The Federal Reserve and Treasury had previously authorized TALF loans through Dec. 31.

The groups said conditions in financial markets have improved considerably in recent months, but that the markets for ABS backed by consumer and business loans and for CMBS are still impaired and seem likely to remain so for some time.

At this time, the groups said they do not anticipate any further additions to the types of collateral that are eligible for the facility.

The securities eligible for collateralizing TALF loans include the major types of newly issued, triple-A-rated ABS backed by loans to consumers and businesses, and newly issued and legacy triple-A-rated CMBS.

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