By Malay Bansal

Treasury announced details of the Legacy TALF program for CMBS on May 19th. It had several interesting features.

One that surprised some in  the market was a turbo feature that limits the payment to TALF borrowers and uses the excess interest to pay down the TALF loan. To me that is a very important and necessary requirement, and I had that in my Oct 2008 suggestions.

What I found interesting was the idea of making the haircut based on Par rather than Market value. Makes the haircut adjust automatically for changes in market value and simplifies administration. Clever idea.

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