The Federal Reserve Board will include legacy assets for the first time in a $1 trillion program to revive credit markets, expanding the effort to commercial real estate securities issued before the start of this year.
The central bank also said it has expanded the number of rating companies permitted to rate assets for the Term Asset-Backed Securities Loan Facility to five after Connecticut Attorney General Richard Blumenthal told the Fed that the three companies initially ruled to be eligible helped fuel the global credit crisis.
Tuesday's announcement is part of the federal government's effort to revive credit for consumers and businesses and end the recession. Fed officials set terms for accepting older commercial mortgage-backed securities after some investors were disappointed that a May 1 announcement included Talf terms only for new commercial mortgage-backed securities.
The first deadline for investors to submit applications for loans to buy commercial mortgage-backed securities is in late July.