Freddie Mac Prices $938 Million Multifamily K-Deal, K-F112

Rhea-AI Summary

Freddie Mac (FMCC) has announced the pricing of a new offering of Structured Pass-Through Certificates, specifically the K-F112 Certificates, totaling approximately $938 million. These certificates are backed by floating-rate multifamily mortgages with a 10-year term linked to the Secured Overnight Financing Rate (SOFR). The offering is set to settle around May 27, 2021. Co-lead managers include Wells Fargo Securities and Citigroup Global Markets, with details available in the preliminary offering circular supplement.

Positive

• New offering of K-F112 Certificates priced at $938 million, indicating strong investor interest.
• Certificates backed by floating-rate multifamily mortgages, providing stability and cash flow.

Negative

• K-F112 Certificates will not be rated, which may deter some risk-averse investors.
• Dependence on SOFR could expose investors to interest rate fluctuations.

MCLEAN, Va., May 19, 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 $938 million in K Certificates (K-F112 Certificates) are expected to settle on or about May 27, 2021. The K-F112 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are SOFR-based.

K-F112 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Discount Margin	Coupon	Dollar Price
AS	$938.999		9.57	23	30-day SOFR avg + 23	100.000
XS	Non-Offered

Details

• Co-Lead Managers and Joint Bookrunners: Wells Fargo Securities, LLC and Citigroup Global Markets Inc.
• Co-Managers: CastleOak Securities, L.P., NatAlliance Securities, LLC, Nomura Securities International, Inc. and PNC Capital Markets LLC

Related Links

• The K-F112 preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/0kf112oc.pdf
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
  

The K-F112 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-F112 Certificates are backed by corresponding classes issued by the FREMF 2021-KF112 Mortgage Trust (KF112 Trust) and guaranteed by Freddie Mac. The KF112 Trust will also issue certificates consisting of the Class CS and R Certificates, which will be subordinate to the classes backing the K-F112 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 the K-F112 Certificates from Freddie Mac (FMCC)?

The K-F112 Certificates total approximately $938 million, backed by floating-rate multifamily mortgages with a 10-year term, linked to the Secured Overnight Financing Rate (SOFR).

When will the K-F112 Certificates be settled?

The K-F112 Certificates are expected to settle on or about May 27, 2021.

Who are the lead managers for the K-F112 Certificates offering by FMCC?

The co-lead managers for the K-F112 offering are Wells Fargo Securities and Citigroup Global Markets.

What is the significance of the floating-rate nature of the K-F112 Certificates?

The floating-rate structure linked to SOFR provides potential stability in cash flows, but also exposes investors to interest rate risk.