Freddie Mac Prices $869 Million Multifamily K-Deal, K-F117

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates) worth approximately $869 million, set to settle on or about July 29, 2021. The K-F117 Certificates, which back floating-rate multifamily mortgages with 10-year terms indexed to the Secured Overnight Financing Rate (SOFR), feature a total principal amount of $869.203 million and a weighted average life of 9.41 years. The offering includes a senior principal and interest class along with an interest-only class, with the intended goal of transferring risk from taxpayers to private investors.

Positive

• New issuance of K Certificates worth approximately $869 million strengthens capital structure.
• Structured to back floating-rate multifamily mortgages, providing stable cash flow opportunities for investors.
• K-F117 Certificates are part of Freddie Mac's strategy to transfer risk from taxpayers to private investors.

Negative

• None.

MCLEAN, Va., July 20, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The approximately $869 million in K Certificates (K-F117 Certificates) are expected to settle on or about July 29, 2021. The K-F117 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are SOFR-based.

K-F117 Pricing

Class	Principal/Notional Amount (mm)	Weighted Average Life (Years)	Discount Margin	Coupon	Dollar Price
AS	$869.203	9.41	24	30-day SOFR avg + 24	100.000
XS	Non-Offered

Details

• Co-Lead Managers and Joint Bookrunners: Credit Suisse Securities (USA) LLC and PNC Capital Markets LLC
• Co-Managers: Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, Samuel A. Ramirez & Company, Inc. and Wells Fargo Securities, LLC

Related Links

• The K-F117 preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/0kf117oc.pdf
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
  

The K-F117 Certificates will not be rated and will include one senior principal and interest class and one interest-only class that is also entitled to static prepayment premiums. The K-F117 Certificates are backed by corresponding classes issued by the FREMF 2021-KF117 Mortgage Trust (KF117 Trust) and guaranteed by Freddie Mac. The KF117 Trust will also issue certificates consisting of the Class CS and R Certificates, which will be subordinate to the classes backing the K-F117 Certificates and will not be guaranteed by Freddie Mac.

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 total value of the K Certificates offering by FMCC?

The total value of the K Certificates offering by FMCC is approximately $869 million.

What is the expected settlement date for the K-F117 Certificates?

The K-F117 Certificates are expected to settle on or about July 29, 2021.

What are the characteristics of the K-F117 Certificates?

The K-F117 Certificates back floating-rate multifamily mortgages with 10-year terms and are indexed to the Secured Overnight Financing Rate (SOFR).

Who are the co-lead managers for the K-F117 Certificates?

The co-lead managers for the K-F117 Certificates are Credit Suisse Securities (USA) LLC and PNC Capital Markets LLC.

How does the K Certificates offering benefit FMCC investors?

The K Certificates offering provides investors with stable cash flows and is part of a strategy to reduce taxpayer risk by involving private investors.