Freddie Mac Prices $1.1 Billion Multifamily K-Deal, K-117

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates, known as K Certificates, valued at approximately $1.1 billion. The K-117 Certificates will back fixed-rate multifamily mortgages, primarily with 10-year terms, and are set to settle around October 13, 2020. The offering includes multiple classes, with principal amounts ranging from $95.365 million to $1,047.422 million. Co-lead managers for the offering include Morgan Stanley and Wells Fargo. This initiative aligns with Freddie Mac's strategy to mitigate taxpayer risk while providing stable investment opportunities.

Positive

• Issuance of K-117 Certificates valued at approximately $1.1 billion enhances liquidity for Freddie Mac.
• Certificates backed by fixed-rate multifamily mortgages contribute to stable cash flows.
• The offering diversifies investment opportunities with various classes and associated yields.

Negative

• None.

MCLEAN, Va., Oct. 05, 2020 (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-117 Certificates), which are expected to settle on or about October 13, 2020.

K-117 Pricing

Class	Principal/Notional Amount (mm)	Weighted Average Life (Years)	Spread (bps)	Coupon	Yield	Dollar Price
A-1	$116.000	5.97	S+27	0.69700%	0.69039%	$99.9979
A-2	$931.422	9.80	S+38	1.40600%	1.07657%	$102.9908
A-M	$128.743	9.91	S+43	1.13800%	1.13275%	$99.9983
X1	$1,047.422	9.13	T+250	1.34452%	3.13999%	$9.8543
XAM	$128.743	9.66	T+240	1.53400%	3.07859%	$12.1818
X3	$95.365	9.74	T+475	2.97200%	5.43444%	$21.8371

Details

• Co-Lead Managers and Joint Bookrunners: Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
• Co-Managers: Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, NatAlliance Securities LLC and Siebert Williams Shank & Co., LLC
• Rating Agencies: Fitch Ratings, Inc. and DBRS, Inc.

Related Links

• The K-117 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/k117oc.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-117 Certificates are backed by corresponding classes issued by the FREMF 2020-K117 Mortgage Trust (K117 Trust) and guaranteed by Freddie Mac. The K117 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-117 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 is Freddie Mac's latest offering as of October 2020?

Freddie Mac's latest offering is a new issuance of Structured Pass-Through Certificates (K-117 Certificates) valued at approximately $1.1 billion.

When is the settlement date for the K-117 Certificates?

The K-117 Certificates are expected to settle on or about October 13, 2020.

What types of mortgages back the K-117 Certificates?

The K-117 Certificates are backed by fixed-rate multifamily mortgages with predominantly 10-year terms.

Who are the co-lead managers for the K-117 offering?

The co-lead managers for the K-117 Certificates offering are Morgan Stanley and Wells Fargo.

What is the purpose of the K Certificates for Freddie Mac?

The K Certificates aim to transfer a portion of the risk of losses from taxpayers to private investors, providing stable cash flows.