Freddie Mac Prices $952 Million Multifamily K-Deal, K-F100

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has announced the pricing of its new offering of structured pass-through certificates, known as K-F100 Certificates, totaling approximately $952 million. This offering features floating rate bonds linked to the Secured Overnight Financing Rate (SOFR), expected to settle on March 4, 2021. The K-F100 Certificates are supported by multifamily mortgages with 7-year terms, and Freddie Mac emphasizes its leadership in multifamily credit risk transfer. This transaction aims to meet diverse investor needs and ensure a stable multifamily market.

Positive

• Pricing of K-F100 Certificates worth approximately $952 million.
• Certificates are backed by SOFR-indexed multifamily mortgages, enhancing investor appeal.
• Freddie Mac maintains its position as a leader in multifamily credit risk transfer.

Negative

• None.

MCLEAN, Va., Feb. 24, 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 $952 million in K Certificates (K-F100 Certificates) are expected to settle on or about March 4, 2021. The K-F100 Certificates are backed by floating-rate multifamily mortgages with 7-year terms, which are SOFR-based.

“With the pricing of our landmark floating rate transaction, K-F100, Freddie Mac Multifamily continues to be the leader in multifamily credit risk transfer,” said Robert Koontz, senior vice president of multifamily capital markets at Freddie Mac. “Our KF-series supports our floating rate debt purchases while meeting a variety of investor needs. We are proud of our role supporting a stable and liquid multifamily market.”

K-F100 Pricing

Class	Principal/Notional Amount (mm)		Weighted Average Life (Years)	Discount Margin	Coupon	Dollar Price
AL	$258.426		6.20	13	1-Month LIBOR + 13	100.000
AS	$694.379		6.53	18	30-day SOFR avg + 18	100.000
XL	Non-Offered
XS	Non-Offered

Details

• Co-Lead Managers and Joint Bookrunners: J.P. Morgan Securities LLC and BofA Securities, Inc.
• Co-Managers: Amherst Pierpont Securities LLC, BMO Capital Markets Corp., Drexel Hamilton, LLC and Wells Fargo Securities, LLC

Related Links

• The K-F100 preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/kf100oc.pdf
• Freddie Mac Multifamily Securitization Overview
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
  

The K-F100 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-F100 Certificates are backed by corresponding classes issued by the FREMF 2021-KF100 Mortgage Trust (KF100 Trust) and guaranteed by Freddie Mac. The KF100 Trust will also issue certificates consisting of the Class CS and R Certificates, which will be subordinate to the classes backing the K-F100 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: Michael Morosi
(703) 918-5851
Michael_Morosi@FreddieMac.com
INVESTOR CONTACTS: Robert Koontz
571-382-4082
Amanda Nunnink
312-407-7510

FAQ

What is the total amount for the K-F100 Certificates offered by Freddie Mac?

The total amount for the K-F100 Certificates is approximately $952 million.

When are the K-F100 Certificates expected to settle?

The K-F100 Certificates are expected to settle on March 4, 2021.

What type of mortgages back the K-F100 Certificates?

The K-F100 Certificates are backed by floating-rate multifamily mortgages with 7-year terms.

What are the benefits of the K-F100 Certificates for investors?

The K-F100 Certificates provide stable cash flows and are designed to meet a variety of investor needs.

How does Freddie Mac support the multifamily market through K-Deals?

Freddie Mac's K-Deals aim to transfer a portion of credit risk from taxpayers to private investors, enhancing market stability.