Freddie Mac Prices $1.1 Billion Multifamily K-Deal, K-124

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K-124 Certificates), totaling approximately $1.1 billion. These certificates, secured by fixed-rate multifamily mortgages, are set to settle on February 11, 2021. The offering includes various classes with different principal amounts, weighted average life, spreads, and yields. Major bookrunners include BofA Securities and Wells Fargo, with ratings provided by Fitch and Kroll. This move aligns with Freddie Mac's strategy to manage risk effectively while providing stable cash flows to investors.

Positive

• Offering of K-124 Certificates priced at $1.1 billion indicates strong demand.
• Structured credit enhancement features attract a wide range of investors.

Negative

• None.

MCLEAN, Va., Feb. 04, 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-124 Certificates), which are expected to settle on or about February 11, 2021.

K-124 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Spread (bps)	Coupon		Yield		Dollar Price
A-1	$83.166		6.80	S+15	0.96400	%	0.95709	%	$99.9936
A-2	$885.643		9.83	S+19	1.65800	%	1.32466	%	$102.9954
A-M	$142.693		9.87	S+24	1.38400	%	1.37818	%	$99.9978
X1	$968.809		9.34	T+85	0.72170	%	1.90298	%	$6.3199
XAM	$142.693		9.62	T+80	0.93612	%	1.88314	%	$8.5171
X3	$90.122		9.71	T+250	2.62012	%	3.59198	%	$21.6189

Details

• Co-Lead Managers and Joint Bookrunners: BofA Securities, Inc. and Wells Fargo Securities, LLC
• Co-Managers: Citigroup Global Markets Inc., Goldman, Sachs and Co. LLC, Multi-Bank Securities, Inc. and Piper Sandler & Co.
• Rating Agencies: Fitch Ratings, Inc. and Kroll Bond Rating Agency, Inc.
  

Related Links

• The K-124 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/k124oc.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-124 Certificates are backed by corresponding classes issued by the FREMF 2021-K124 Mortgage Trust (K124 Trust) and guaranteed by Freddie Mac. The K124 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-124 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, 2019, filed with the Securities and Exchange Commission (SEC) on February 13, 2020; 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, 2019, 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, 2019, 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 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: Michael Morosi
703-918-5851
Michael_Morosi@FreddieMac.com
INVESTOR CONTACTS: Robert Koontz
571-382-4082
Amanda Nunnink
312-407-7510

FAQ

What are K-124 Certificates issued by Freddie Mac?

K-124 Certificates are Structured Pass-Through Certificates backed by fixed-rate multifamily mortgages issued by Freddie Mac.

What is the principal amount of the K-124 offering?

The principal amount of the K-124 offering is approximately $1.1 billion.

When will the K-124 Certificates settle?

The K-124 Certificates are expected to settle on February 11, 2021.

Who are the lead managers for the K-124 offering?

BofA Securities and Wells Fargo Securities are the co-lead managers and joint bookrunners for the K-124 offering.

What is the purpose of these K-Deal securities?

K-Deals are designed to transfer a portion of loss risk from taxpayers to private investors while providing structured credit enhancements.