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NEW YORK CITY-The Federal Reserve Bank of New York said Thursday that it had issued about $669 million in TALF loans to buy legacy CMBS in its July subscription round, marking the first success for the recently implemented program. However, for the second month in a row, the New York Fed’s offer of loans to buy newly issued CMBS drew no takers.

According to the Financial Times, the New York Fed’s next monthly loan date in mid-August may generate loans for new CMBS, as there are several deals in the works that may be ready by then. New York Fed data indicates that borrowing costs on CMBS through TALF have gone down since June: 3.0275% for a fixed three-year loan and 3.8735% for a fixed five-year loan as of Thursday. That compares to rates of 3.271% for three-year and 4.13% for five-year in June.

Earlier this week, CMBS experts told GlobeSt.com that the TALF program stood a chance of succeeding if the pieces fall into place. “The reason no one applied for the first round is that there simply was no new product in the marketplace,” Spencer Levy, senior managing director with CB Richard Ellis, told GlobeSt.com on Tuesday. “The view I’ve gotten from the marketplace has been a bit warmer than what some suggest, particularly from some of the originators,” because “they see some purchasers of their CMBS securities are going to be able leverage it up using TALF capital.”

In a June 4 speech, New York Fed president William Dudley commented, “We are not going to have a subscription mid-June, but the process for CMBS securitization takes quite a while to ramp up so we would actually not expect anything in that mid-June subscription period. Don’t take that as a mark of CMBS effort, please.”

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