FT’s Alphaville has a great post on re-Remics and the push to make them respectable, at least in the eyes of the Federal Reserve and its TALF program.
from Rolfe Winkler:
From Reuters: S&P tweaks CMBS model, reverses week-old downgrades
Standard & Poor's on Tuesday reversed some controversial downgrades of widely watched commercial mortgage-backed securities in a highly unusual response to investor ire.In a rare and dramatic reversal from just a week ago, S&P upgraded the bonds to the top AAA rating. The move reinstates their coveted eligibility under a Federal Reserve lending program that is behind a strong rally for the $700 billion market.
Chalk up another stumble for TALF, the Fed’s program to revitalize the securitization market. After expanding the program to include commercial mortgage-backed securities, the Federal Reserve on Tuesday reported that no one showed up to take advantage of the central bank’s attractive financing. Granted this was the inaugural round for loans to investors with eligible CMBS collateral, so it may take some time to take off.