Freddie Mac Prices $626 Million Multifamily K-Deal, K-SG2
Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K-SG2 Certificates) aimed at multifamily mortgage-backed securities, totaling approximately $626 million. The certificates, expected to settle on December 16, 2021, are designated as Sustainability Bonds due to their backing by mortgage loans that provide affordable housing for low-to-moderate-income families. Notable financial details include different classes of certificates with varying principal amounts, weighted average lives, spreads, coupons, and yields.
- New offering of K-SG2 Certificates priced at approximately $626 million.
- Certificates designated as Sustainability Bonds, promoting affordable housing.
- Potential stable cash flows and structured credit enhancement for investors.
- None.
MCLEAN, Va., Dec. 09, 2021 (GLOBE NEWSWIRE) -- 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
K-SG Deals – Sustainability Bonds. Due to the characteristics of the underlying mortgage loans, the K-SG2 Certificates are designated as “Sustainability Bonds” within the Freddie Mac Multifamily Sustainability Bonds Framework. The multifamily properties that secure the underlying mortgage loans backing Sustainability Bonds: (i) provide affordable housing to low-to-moderate-income families, at loan underwriting; (ii) may have features, or be located in areas, that further economic opportunity for residents; and (iii) may include certain environmental impact features.
K-SG2 Pricing
| Class | Principal/Notional Amount (mm) | Weighted Average Life (Years) | Spread (bps) | Coupon | Yield | Dollar Price | ||
| A-1 | 6.65 | S+16 | ||||||
| A-2 | 9.81 | S+30 | ||||||
| X1 | 9.29 | T+140 | ||||||
| X3 | 9.69 | T+320 | ||||||
Details
- Co-Lead Managers and Joint Bookrunners: J.P. Morgan Securities LLC and Citigroup Global Markets Inc.
- Co-Managers: Barclays Capital Inc., Loop Capital Markets LLC, Nomura Securities International, Inc. and Oppenheimer & Co. Inc.
Related Links
- The K-SG2 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/ksg2oc.pdf
- Freddie Mac Multifamily Securitization Overview
- Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
- More information about K-SG Deal program
The K-SG2 Certificates are backed by corresponding classes issued by the FREMF 2021-KSG2 Mortgage Trust (K-SG2 Trust) and guaranteed by Freddie Mac. The K-SG2 Trust will also issue certificates consisting of the Class X2-A, Class X2-B, Class C and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-SG2 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.
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FAQ
What is the total amount of the new offering by Freddie Mac (FMCC)?
When is the expected settlement date for the K-SG2 Certificates?
What are K-SG2 Certificates classified as?
What kind of families do the underlying loans for K-SG2 Certificates aim to support?
Who are the co-lead managers of the new offering?
