WASHINGTON, May 19 (Reuters) - The U.S. Federal Reserve on Tuesday widened its safety net for the downtrodden commercial property sector by making older loans eligible for an emergency program set up to revive dormant credit markets.
The Fed said its $200 billion Term-Asset Backed Securities Loan Facility, which it has said may grow to $1 trillion, will be opened to AAA-rated legacy commercial mortgage-backed securities that were issued before Jan. 1.
The Fed said in March it would open the door to legacy securities for TALF loans, and this is the first legacy asset class to gain the go-ahead.
“The extension of eligible TALF collateral to include legacy CMBS is intended to promote price discovery and liquidity,” the Fed said in a statement. (Reporting by Mark Felsenthal and Alister Bull; Editing by Neil Stempleman)