Freddie Mac Prices $1.2 Billion Multifamily K-Deal, K-125

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates, estimated at approximately $1.2 billion in K-125 Certificates, scheduled to settle around February 26, 2021. These certificates are backed by fixed-rate multifamily mortgages with predominantly 10-year terms. Key details include Class A-1 with a notional amount of $116.150 million and a yield of 1.09223%, among others. Co-managers include Barclays and Credit Suisse, while the certificates are rated by Fitch Ratings and DBRS.

Positive

• New issuance of approximately $1.2 billion in K-125 Certificates indicates strong investor interest and continued market activity.
• Certificates backed by fixed-rate multifamily mortgages provide stable cash flows, appealing to investors.

Negative

• None.

MCLEAN, Va., Feb. 19, 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 $1.2 billion in K Certificates (K-125 Certificates), which are expected to settle on or about February 26, 2021.

K-125 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Spread (bps)	Coupon		Yield		Dollar Price
A-1	$116.150		6.80	S+11	1.10100%		1.09223%		$100.0000
A-2	$986.800		9.85	S+18	1.84600%		1.51010%		$102.9938
A-M	$156.592		9.91	S+23	1.57200%		1.56578%		$99.9990
X1	$1,102.950		9.30	T+85	0.58638%		2.04678%		$5.0723
XAM	$156.592		9.66	T+80	0.78193%		2.04034%		$7.1414
X3	$102.126		9.66	T+250	2.65393%		3.74031%		$21.6774

Details

• Co-Lead Managers and Joint Bookrunners: Barclays Capital Inc. and Credit Suisse Securities (USA) LLC
• Co-Managers: BofA Securities, Inc., J.P. Morgan Securities LLC, Piper Sandler & Co. and Samuel A. Ramirez & Company, Inc.
• Rating Agencies: Fitch Ratings, Inc. and DBRS, Inc.
  

Related Links

• The K-125 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/k125oc.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-125 Certificates are backed by corresponding classes issued by the FREMF 2021-K125 Mortgage Trust (K125 Trust) and guaranteed by Freddie Mac. The K125 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-125 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, judgements 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:
Michael Morosi
703-918-5851
Michael_Morosi@FreddieMac.com

INVESTOR CONTACTS:
Robert Koontz
571-382-4082
Amanda Nunnink
312-407-7510

FAQ

What is the amount of the new K-125 Certificates issued by Freddie Mac?

Freddie Mac has issued approximately $1.2 billion in K-125 Certificates.

When is the settlement date for the K-125 Certificates?

The K-125 Certificates are expected to settle on or about February 26, 2021.

What types of loans are backing the K-125 Certificates?

The K-125 Certificates are backed by fixed-rate multifamily mortgages.

Who are the co-managers of the K-125 Certificates?

The co-managers include Barclays Capital and Credit Suisse.

What are the coupon rates for Class A-1 and Class A-2 of the K-125 Certificates?

Class A-1 has a coupon rate of 1.10100% and Class A-2 has a coupon rate of 1.84600%.