Freddie Mac Prices $743 Million Multifamily K-Deal, K-743

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) announced the pricing of a new offering of Structured Pass-Through Certificates known as K-743 Certificates, backed by fixed-rate multifamily mortgages with 7-year terms. This offering is anticipated to total approximately $743 million, with settlement expected around June 30, 2021. The K-743 Trust will issue additional non-guaranteed classes, while the K-743 Certificates aim to provide stable cash flows and risk transfer from taxpayers to private investors. Major co-lead managers include J.P. Morgan Securities LLC and Amherst Pierpont Securities LLC.

Positive

• Issuance of $743 million in K-743 Certificates enhances liquidity and market presence.
• The K-743 Certificates offer stable cash flows and structured credit enhancements.

Negative

• None.

MCLEAN, Va., June 25, 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 7-year terms. The company expects to issue approximately $743 million in K Certificates (K-743 Certificates), which are expected to settle on or about June 30, 2021.

K-743 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Spread (bps)	Coupon	Yield	Dollar Price
A-1	$29.100		4.43	S+2	0.8540%	0.8427%	$99.9985
A-2	$615.064		6.85	S+12	1.7700%	1.2983%	$102.9942
A-M	$99.488		6.90	S+17	1.3650%	1.3551%	$99.9992
X1	$644.164		6.49	T+55	0.9259%	1.7111%	$5.8331
XAM	Non-Offered
X3	$60.297		6.65	T+200	2.9545%	3.1892%	$17.8226

Details

• Co-Lead Managers and Joint Bookrunners: J.P. Morgan Securities LLC and Amherst Pierpont Securities LLC
• Co-Managers: Brean Capital, LLC, Citigroup Global Markets Inc., Drexel Hamilton, LLC and Oppenheimer & Co. Inc.
• Rating Agencies: Fitch Ratings, Inc. and Kroll Bond Rating Agency, LLC
  

Related Links

• The K-743 Preliminary Offering Circular Supplement:
  http://www.freddiemac.com/mbs/data/k743oc.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-743 Certificates are backed by corresponding classes issued by the FREMF 2021-K743 Mortgage Trust (K-743 Trust) and guaranteed by Freddie Mac. The K-743 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-743 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 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 amount for the new K-743 Certificates offered by Freddie Mac (FMCC)?

Freddie Mac is offering approximately $743 million in K-743 Certificates.

When is the settlement date for the K-743 Certificates?

The K-743 Certificates are expected to settle on or about June 30, 2021.

Who are the co-lead managers for the K-743 offering by Freddie Mac (FMCC)?

The co-lead managers for the K-743 offering are J.P. Morgan Securities LLC and Amherst Pierpont Securities LLC.

What type of mortgages back the K-743 Certificates from Freddie Mac (FMCC)?

The K-743 Certificates are backed by fixed-rate multifamily mortgages with predominantly 7-year terms.

What financial benefits do K-743 Certificates provide to investors?

K-743 Certificates are designed to offer stable cash flows and structured credit enhancements.