Freddie Mac Prices $937 Million Multifamily K-Deal, K-F108

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced an offering of approximately $937 million in Structured Pass-Through Certificates (K-F108 Certificates), backed by floating-rate multifamily mortgages with 10-year terms indexed to the Secured Overnight Financing Rate (SOFR). The K-F108 Certificates are set to settle on or about April 29, 2021. The offering includes one senior principal and interest class and one interest-only class. They are not rated and are part of Freddie Mac's strategy to transfer risk to private investors. The co-lead managers are Barclays Capital Inc. and J.P. Morgan Securities LLC.

Positive

• Freddie Mac priced approximately $937 million in K-F108 Certificates, expected to settle April 29, 2021.
• K-F108 Certificates backed by floating-rate multifamily mortgages enhance liquidity.
• Involvement of reputable co-lead managers Barclays Capital Inc. and J.P. Morgan Securities LLC signifies strong market interest.

Negative

• K-F108 Certificates are unguaranteed and not rated, indicating potential risk for investors.
• The certificates include both a senior principal and interest class and an interest-only class, which may complicate investor evaluation.

MCLEAN, Va., April 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 $937 million in K Certificates (K-F108 Certificates) are expected to settle on or about April 29, 2021. The K-F108 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are SOFR-based.

K-F108 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Discount Margin	Coupon	Dollar Price
AS	$937.905		9.44	25	30-day SOFR avg + 25	100.000
XS	Non-Offered

Details

• Co-Lead Managers and Joint Bookrunners: Barclays Capital Inc. and J.P. Morgan Securities LLC
• Co-Managers: BMO Capital Markets Corp., Cantor Fitzgerald & Co., CastleOak Securities, L.P. and Morgan Stanley & Co. LLC

Related Links

• The K-F108 preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/0kf108oc.pdf
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
  

The K-F108 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-F108 Certificates are backed by corresponding classes issued by the FREMF 2021-KF108 Mortgage Trust (KF108 Trust) and guaranteed by Freddie Mac. The KF108 Trust will also issue certificates consisting of the Class CS and R Certificates, which will be subordinate to the classes backing the K-F108 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 are the details of Freddie Mac's K-F108 Certificates offering?

Freddie Mac has priced approximately $937 million in K-F108 Certificates, backed by floating-rate multifamily mortgages. They are expected to settle on April 29, 2021.

Who are the co-lead managers for the K-F108 Certificates?

The co-lead managers for the K-F108 Certificates are Barclays Capital Inc. and J.P. Morgan Securities LLC.

What is the significance of Freddie Mac's K-F108 Certificates?

The K-F108 Certificates represent a strategy for Freddie Mac to transfer risk from taxpayers to private investors, enhancing liquidity in multifamily mortgage markets.

What is the expected settlement date for the K-F108 Certificates?

The K-F108 Certificates are expected to settle on or about April 29, 2021.

Are the K-F108 Certificates rated?

No, the K-F108 Certificates will not be rated, indicating potential risks for investors.