OREANDA-NEWS. Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1 billion in K Certificates (K-055 Certificates), which are expected to settle on or about June 22, 2016.

                     
K-055 Pricing                    
Class   Principal/
Notional Amount (mm)		   Weighted Average Life (Years)   Spread (bps)   Coupon   Yield   Dollar Price
A-1   $130.963   5.85   S + 61   2.2630%   1.8800%   $101.9959
A-2   $906.000   9.66   S + 77   2.6730%   2.3177%   $102.9918
X1   $1,036.963   9.18   T + 260   1.3688%   4.1693%   $10.4339
X3   $121.619*   9.57   T + 675   1.6419%   8.3604%   $10.9233

*50% of the Class X3 notional size

Details

  • Co-Lead Managers and Joint Bookrunners: Barclays Capital Inc. and Citigroup Global Markets, Inc.
  • Co-Managers: Academy Securities Inc., Amherst Pierpont Securities LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
  • Rating Agencies: Fitch Ratings, Inc. and Morningstar Credit Ratings, LLC

Related Links

The K-055 Certificates are backed by corresponding classes issued by the FREMF 2016-K55 Mortgage Trust (K-55 Trust) and guaranteed by Freddie Mac. The K-55 Trust will also issue certificates consisting of the Class B, C, D and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-055 Certificates. 

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.

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 the largest source of financing for multifamily housing.