UPDATE 1-Gross: Treasury plan could cover CMBS, corporates

(Recasts lead; adds comments, details on TALF)

NEW YORK, Feb 9 (Reuters) - The biggest money managers will get involved in a comprehensive financial plan to be announced Tuesday by Treasury Secretary Tim Geithner if it includes the government purchase of commercial mortgage-backed securities, (CMBS) and corporate bonds, Bill Gross, the manager of the world's biggest bond fund, told CNBC on Monday.

The Obama administration is considering an expansion of the Federal Reserve's consumer-lending facility, known as the Term Asset-Backed Securities Loan Facility (TALF), that could potentially buy up heavily battered CMBS and other assets.

"The discussion or the potential for tomorrow is the expansion in the CMBS and maybe even into corporate bonds," said Gross, co-chief investment officer at Pacific Investment Management Co., or PIMCO.

"Other countries have done that already. The UK has done that. We may see a hint of that and, to the extent that you do, then, gosh, CMBS, which are trading at 12, 13, and 14 percent and corporate bonds in the high single digits -- they've become attractive situations."

Under the $200 billion program, which was announced in November after investors stopped buying securities backed by consumer debt, the Fed will make loans to almost any U.S. firm that is willing to use the government financing to buy securities tied to credit-card, small-business, student and auto loans.

Meanwhile, yields on Treasury securities have been rising, negating some of the government's efforts to revive the mortgage market.

If the benchmark 10-year U.S. Treasury note US10YT=RR is sold at a yield above 3 percent at an auction this week, that would increase the chance the U.S. central bank will also buy longer-maturity Treasuries. When the Fed does start buying government debt, that will be a "big day" for bonds and currency markets, he added.

Gross manages Pimco's flagship Total Return fund, which currently has $136 billion in assets. (Reporting by John Parry, Jennifer Ablan and Richard Leong; Editing by Kenneth Barry)