X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CLEVELAND-Developer’s Diversified Realty Corp. is reported to be launching two bond sales, with the hopes of raising $600 million, in order to test the government’s Term Asset-Backed Securities Loan Facility. The TALF program was designed to increase investor demand for securities linked to a variety of assets, according to the Wall Street Journal article today.

DDR’s two portfolios of assets contain roughly 60 shopping centers across the world and are valued at more than $800 million each. The properties, filled with discount retailers, offer a stable cash flow–a key component to the TALF program. “The assets serve as good collateral for risk-averse lenders,” CIO David Oakes, told the Wall Street Journal Tuesday. If DDR is able to borrow $600 million its loan-to-value ratio will be 40%.

Despite uncertainty of the value of expanding the $1-trillion TALF program to the CMBS market, experts have lately issued a cautious but positive thumbs-up. As reported by GlobeSt.com, this June the Treasury Department expanded the TALF program to CMBS securities issued prior to Jan. 1, 2009.

DDR is unlikely to be the only company looking to take advantage of the program before is expires at the end of the year. Annemarie DiCola, CEO of Trepp, told GlobeSt.TV “there are people in the sector who are very excited about utilizing TALF and the fact that TALF financing can help CMBS investors; and as a result, we have heard, there are a number of deals that are in the works.” According to the Wall Street Journal article, Westfield Group, Macerich Co. and Vornado Realty Trust have all been rumored to be planning on taking advantage of the TALF program.

Not every company will be able to take advantage of the government program, according to the Wall Street Journal article, smaller real estate companies are barred from participating. Loans that won’t qualify include floating-rate mortgages, construction loans and loans for properties being repositioned without a stable financial standing.

To read the full Wall Street Journal article click here.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.