Freddie Mac Prices $1.2 Billion Multifamily K-Deal Backed by Seasoned Loans

Freddie Mac Prices $1.2 Billion Multifamily K-Deal Backed by Seasoned Loans

Note: Spread Updated on the Class X in the Pricing Chart

MCLEAN, VA – August 20, 2015 – (RealEstateRama) — Freddie Mac (OTCQB: FMCC) recently priced its second K-P Series offering of Structured Pass-Through Certificates (K Certificates) which are multifamily mortgage-backed securities. The company expects to issue approximately $1.2 billion in K Certificates (K-P02 Certificates), which are expected to settle on or about August 27, 2015. The K-P02 Certificates are guaranteed by Freddie Mac and are backed by 70 seasoned multifamily mortgages from the company’s retained portfolio. This is the company’s seventeenth K Certificates offering this year.

In the K-P Series, Freddie Mac purchases and guarantees all of the securities issued by the related underlying trust. The first K-P Certificates were issued in October 2012.

K-P02 Pricing

Class Principal/Notional Amount (mm) Weighted Average Life (Years) Spread (bps) Coupon Yield Dollar Price
A-1 $114.000 2.500 S+25 1.3290% 1.348% $99.8749
A-2 $1,086.018 4.707 S+47 2.3550% 2.107% $100.9960
X $1,200.018 3.583 T+478.8 2.6553% 6.000% $8.1024

Details

  • Sole Lead Manager and Bookrunner: Merrill Lynch, Pierce, Fenner & Smith Incorporated
  • Co-Managers: Bonwick Capital Partners, LLC, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC
  • The K-P02 Certificates are backed by corresponding classes issued by the FREMF 2015-KP02 Mortgage Trust (K-P02 Trust) and guaranteed by Freddie Mac

Related Links

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2014, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K.

Freddie Mac’s press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2014, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company’s Web site atwww.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blogFreddieMac.com/blog.

The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac’s future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company’s future results are discussed more fully in our reports filed with the SEC.

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Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac raises capital on Wall Street and throughout the world's capital markets to finance mortgages for families across America. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters

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