Policy Issues

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On April 14, The Roundtable along with five other industry associations wrote to Treasury, the Federal Reserve and the Federal Housing Finance Agency applauding them for their recent work during the COVID-19 crisis, but urging more must be done.

A non-functioning CMBS market will impair the overall lending market, especially given that banks and insurance companies look to CMBS to price risk for a number of products on their balance sheets.

Recommended action to this end, we write to urge that the TALF program be broadened to include a wider range of investment grade commercial real estate debt instruments. Specifically, we recommend that the following investment grade instruments be considered eligible TALF assets: 

• Legacy and new issuance, investment grade, non-agency CMBS; 

• Investment grade Agency Credit Risk Transfer (CRT) securities;

• Legacy and new issuance Single-Asset, Single-Borrower (SASB) CMBS;

• Commercial real estate (CRE) collateralized loan obligations (CLOs); and

• U.S. commercial real estate (CRE) first mortgage loans (which have capital charges equivalent to investment grade/NAIC CM 1 and 2 and loans in good standing, or can obtain a rating agency letter confirming that the pledged loan is rated at least single-A).