The Federal Reserve Bank of New York announced yesterday the results of November’s Term ABS Loan Facility (TALF) operations supporting new and legacy CMBS.
The New York Fed received $1.42 billion loan requests for legacy CMBS and $72.2 million loan requests for newly issued CMBS. In total, investors requested $2.14 billion in loans in November’s CMBS TALF subscription, which is the fifth round.
The rates for the current facilities were 2.7200 percent for fixed three-year loans and 3.5427 for fixed five-year loans.
As reported by StructuredFinanceNews.com yesterday, U.S. mall owner Developers Diversified Realty Corp. (DDR) kicked off new CMBS issuance after an 18-month drought by selling $400 million of securities on Monday under TALF. This is also the first offering under the new-issue CMBS TALF.
The deal was met with strong investor interest, according to market reports. The positive response allowed DDR to reduce pricing spread from as much as 175 basis points. Its $323 million triple-A rated, five-year notes came in at a narrower 1.4 percentage point premium to the five-year interest rate swap benchmark, or a yield of 3.807 percent, market sources said.
Underwriter Goldman Sachs lowered yield premiums — from earlier guidance levels of 1.6 to 1.75 percentage points — also as a result of the strong buyer interest.