Freddie Mac Prices $1.1 Billion Multifamily K-Deal, K-131

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates) amounting to approximately $1.1 billion. These K-131 Certificates are backed by fixed-rate multifamily mortgages with predominantly 10-year terms. Expected settlement is around September 17, 2021. The K-131 Certificates include various classes with diverse principal amounts and yield rates, such as A-1 with $52.793 million and an average yield of 1.14931%, and A-2 with $970.887 million at 1.51177%.

Positive

• Issuance of approximately $1.1 billion in K Certificates enhances capital backing.
• K Certificates feature a variety of classes, offering diverse investment options.

Negative

• Certain classes of certificates are not guaranteed by Freddie Mac, increasing risk for investors.

MCLEAN, Va., Sept. 13, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly 10-year terms. The company expects to issue approximately $1.1 billion in K Certificates (K-131 Certificates), which are expected to settle on or about September 17, 2021.

K-131 Pricing

Class	Principal/Notional Amount (mm)	Weighted Average Life (Years)	Spread (bps)	Coupon		Yield		Dollar Price
A-1	$52.793	6.56	S+7	1.15800	%	1.14931	%	$99.9948
A-2	$970.887	9.69	S+18	1.85300	%	1.51177	%	$102.9933
A-M	$167.740	9.86	S+26	1.60900	%	1.60265	%	$99.9992
X1	$1,023.680	9.29	T+65	0.72948	%	1.93698	%	$6.4540
XAM	$167.740	9.61	T+65	0.93764	%	1.96029	%	$8.5656
X3	$62.707	9.68	T+250	2.94664	%	3.81554	%	$24.0406

Details

• Co-Lead Managers and Joint Bookrunners: Goldman Sachs and Co. LLC and Wells argo Securities, LLC
• Co-Managers: Academy Securities Inc., Amherst Pierpont Securities LLC, Deutsche Bank Securities Inc. and Piper Sandler & Co.
• Rating Agencies: Fitch Ratings, Inc. and DBRS, Inc.
  

Related Links

• The K-131 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/k131oc.pdf   
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
• More information about Class A-M and Class XAM

The K-131 Certificates are backed by corresponding classes issued by the FREMF 2021-K131 Mortgage Trust (K131 Trust) and guaranteed by Freddie Mac. The K131 Trust will also issue certificates consisting of Class X2-A, Class X2-B, Class D and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-131 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.

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, 2020, filed with the Securities and Exchange Commission (SEC) on February 11, 2021; 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, 2020, 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. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company’s control. Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and estimates, and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. These assumptions, judgments, estimates and factors are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2020, and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s website at www.sec.gov. The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release. The multifamily investors section of the company’s Web site at https://mf.freddiemac.com/investors/ will also be updated, from time to time, with any information on material developments or other events that may be important to investors, and we encourage investors to access this website on a regular basis for such updated information.

The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release. The multifamily investors section of the company’s Web site at https://mf.freddiemac.com/investors/ will also be updated, from time to time, with any information on material developments or other events that may be important to investors, and we encourage investors to access this website on a regular basis for such updated information.

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 undertakes no obligation, and disclaims any duty, to update any of the information in those documents.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.

MEDIA CONTACT: Erin Mancini
703-903-1530
Erin_Mancini@FreddieMac.com
INVESTOR CONTACTS: Robert Koontz
571-382-4082
Luba Kim-Reynolds
212-418-8879

FAQ

What is the value of the new K-131 Certificates issued by FMCC?

The new K-131 Certificates issued by FMCC are valued at approximately $1.1 billion.

When is the settlement date for the K-131 Certificates?

The settlement date for the K-131 Certificates is expected to be around September 17, 2021.

What types of mortgages back the K-131 Certificates from FMCC?

The K-131 Certificates are backed by fixed-rate multifamily mortgages with predominantly 10-year terms.

Which companies are the co-lead managers for the K-131 Certificates?

The co-lead managers for the K-131 Certificates are Goldman Sachs and Wells Fargo Securities.

Are the K-131 Certificates guaranteed by Freddie Mac?

While the K-131 Certificates are backed by certain classes issued by the FREMF 2021-K131 Mortgage Trust, some classes are not guaranteed by Freddie Mac.