The New York Federal Reserve has released the January subscription details for its Talf programme — the Fed’s effort to help jump-start the securitisation market.
All in all, the Fed accepted 46 bonds for the January legacy CMBS portion of its Talf programme, but declined five — a rejection rate of about 10 per cent. That’s rather higher than the rates we’ve seen in previous months.
The rejected CUSIPS are:
BACM 2006-2 A4
BACM 2006-6 A3
BACM 2007-2 A2
CSMC 2006-C4 A3
WBCMT 2007-C33 A3
The Fed’s Talf reasoning is always a bit mysterious, since the central bank refused to disclose details of its methoodology. They’ve rejected bonds that were accepted in previous monthly subscriptions before, for instance, and they look to have done it twice in January.
WBCMT 2007-C33 A3 was accepted back in August, but rejected this month. Meanwhile BACM 2006-2 A4 was not only accepted in the October subscription, the A3 class from the same deal was accepted this month.
What’s more, it looks like the Fed’s Talf-thinking doesn’t make much sense to bond investors either, and they’re now trying their chances with the Fed. BACM 2007-2 A2 had already been rebuffed in the November subscription (though it was accepted in October) which means this looks to be the first time that a rejected bond was re-submitted.
It still got declined though.