Freddie Mac Prices $907 Million Multifamily K-Deal, K-745

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates, the K-745 Certificates, amounting to approximately $907 million. These certificates are backed by fixed-rate multifamily mortgages with predominantly 7-year terms and are expected to settle by September 23, 2021. The K-745 Trust will also issue unguaranteed subordinate bonds. The co-lead managers for this offering are BofA Securities and Morgan Stanley. This initiative is part of Freddie Mac's strategy to transfer risk away from taxpayers to private investors.

Positive

• Issuance of approximately $907 million in K-745 Certificates provides capital for Freddie Mac.
• K-745 Certificates backed by fixed-rate multifamily mortgages enhance cash flow stability.
• Involvement of major investment banks like BofA Securities and Morgan Stanley indicates strong market confidence.

Negative

• None.

MCLEAN, Va., Sept. 16, 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 $907 million in K Certificates (K-745 Certificates), which are expected to settle on or about September 23, 2021.

K-745 Pricing

Class	Principal/Notional Amount (mm)	Weighted Average Life (Years)	Spread (bps)	Coupon	Yield	Dollar Price
A-1	$56.943	4.56	S+1	0.8360%	0.8252%	$99.9987
A-2	$703.849	6.89	S+10	1.6570%	1.1899%	$102.9954
A-M	$146.903	6.93	S+16	1.2630%	1.2541%	$99.9965
X1	$760.792	6.47	T+40	0.6782%	1.4208%	$4.2793
XAM	Non-Offered
X3	Non-Offered

Details

• Co-Lead Managers and Joint Bookrunners: BofA Securities, Inc. and Morgan Stanley & Co. LLC
• Co-Managers: Brownstone Investment Group, LLC, Cantor Fitzgerald & Co., Mischler Financial Group, Inc. and PNC Capital Markets LLC
• Rating Agencies: Fitch Ratings, Inc. and Kroll Bond Rating Agency, LLC
  

Related Links

• The K-745 Preliminary Offering Circular Supplement: http://www.freddiemac.com/mbs/data/k745oc.pdf
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
  

The K-745 Certificates are backed by corresponding classes issued by the FREMF 2021-K745 Mortgage Trust (K-745 Trust) and guaranteed by Freddie Mac. The K-745 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-745 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 are the K-745 Certificates offered by Freddie Mac?

The K-745 Certificates are Structured Pass-Through Certificates backed by fixed-rate multifamily mortgages, totaling approximately $907 million.

When is the expected settlement date for the K-745 Certificates?

The K-745 Certificates are expected to settle on or about September 23, 2021.

Who are the co-lead managers for the K-745 offering?

The co-lead managers are BofA Securities and Morgan Stanley.

What is the purpose of issuing K-745 Certificates?

The K-745 Certificates help Freddie Mac transfer a portion of risk from taxpayers to private investors.

What types of mortgages back the K-745 Certificates?

The K-745 Certificates are backed primarily by fixed-rate multifamily mortgages with predominantly 7-year terms.