Agency Commercial Mortgage-Backed Securities: Program Terms and Conditions

Effective March 26, 2020
Purchases

Effective March 23, 2020, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to increase the System Open Market Account (SOMA) holdings of agency mortgage-backed securities in the amounts needed to support smooth market functioning. The FOMC directed the Desk to include purchases of agency commercial mortgage-backed securities (agency CMBS) in such purchases.

Eligible Assets
The Desk will purchase agency CMBS that meet each of the following criteria at the time of purchase:

  • Issued by an eligible issuer
  • Fully guaranteed as to principal and interest by eligible issuer
Ineligible Assets
  • Re-securitization of real estate mortgage investment conduits (Re-REMICS)
  • Interest-only certificates
  • Principal-only certificates
  • Residual certificates
Eligible Issuers

Eligible issuers for purchases of agency CMBS are the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae).

Investment Manager

BlackRock Financial Management, Inc.

Custodian

JPMorgan Chase Bank, N.A.

Purchase Mechanism

Purchases will be conducted through a competitive process in which primary dealers submit offers on specific securities for sale to the Desk via the Investment Manager. Offers will be evaluated for reasonable pricing and acceptance will be based on the most competitive offers.

Purchase Schedule

It is anticipated that operations will initially be held two to three times per week, subject to market conditions. The schedule for, size, and composition of, purchases will be adjusted as appropriate to support smooth market functioning of agency CMBS markets.

Minimum Lot Size

The initial minimum lot size (per CUSIP) will be not less than $5 million USD in current face value.