Freddie Mac Prices Approximately $1.0 Billion Securitization of Re-Performing Loans

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has announced the pricing of its first Seasoned Credit Risk Transfer Trust (SCRT) offering for 2022, valued at approximately $1.0 billion. This securitization includes around $958 million in guaranteed senior certificates and $86 million in unguaranteed subordinate certificates, comprising seasoned re-performing loans (RPLs). The transaction is set to settle on April 12, 2022, and is part of Freddie Mac's strategy to manage mortgage-related investment risks effectively. The loans are serviced by NewRez LLC and Specialized Loan Servicing LLC.

Positive

• Freddie Mac's SCRT offering contributes to reducing less liquid assets in its mortgage-related investments portfolio.
• The offering involves seasoned, re-performing loans which are less risky and provide more stability.

Negative

• None.

MCLEAN, Va., April 07, 2022 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) announced today the pricing of the first Seasoned Credit Risk Transfer Trust (SCRT) offering of 2022—a securitization of approximately $1.0 billion including both guaranteed senior and unguaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs). The SCRT program is a fundamental part of Freddie Mac's seasoned loan offerings which reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions.

Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2022-1 includes approximately $958 million in guaranteed senior certificates and $86 million in unguaranteed mezzanine and subordinate certificates. The mezzanine certificates will be rated. The transaction is expected to settle on April 12, 2022. The underlying collateral consists of 6,677 seasoned fixed-, step-, and adjustable-rate RPLs, and includes both loans that were modified to assist borrowers at risk of foreclosure and loans that were never modified. On the Closing Date, the assets of the Trust will consist of seasoned, re-performing Mortgage Loans that, as of the Cut-Off Date, are either current or no more than 30 days delinquent
under the MBA Method.

The loans are serviced by NewRez LLC, d/b/a Shellpoint Mortgage Servicing and Specialized Loan Servicing LLC and will be serviced in accordance with requirements that, in the event of default, prioritize borrower retention options and promote neighborhood stability.

Advisors to this transaction are Citigroup Global Markets Inc. and BofA Securities, Inc., as co-lead managers and joint bookrunners, and J.P. Morgan Securities LLC, Nomura Securities International, Inc., Oppenheimer & Co. Inc., Wells Fargo Securities LLC, and Loop Capital Markets LLC (a minority-owned business) as co-managers.

To date, Freddie Mac has sold over $9.7 billion of Non-Performing Loans (NPLs) and securitized more than $74 billion of RPLs consisting of $30 billion of fully guaranteed PCs, $33 billion of SCRT senior/sub securities, and over $11 billion of Seasoned Loans Structured Transaction (SLST) securities. Additional information about the company's seasoned loan offerings can be found at:
http://www.freddiemac.com/seasonedloanofferings/

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, 2021, filed with the Securities and Exchange Commission (SEC) on February 10, 2022; 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, 2021, 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, 2021, and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company’s website 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 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: Fred Solomon
703-903-3861
Frederick_Solomon@freddiemac.com

FAQ

What is the Freddie Mac SCRT offering announced in April 2022?

Freddie Mac's SCRT offering is a securitization valued at approximately $1.0 billion, including seasoned re-performing loans, priced to manage mortgage risks effectively.

What is the expected settlement date for the Freddie Mac SCRT offering?

The Freddie Mac SCRT offering is expected to settle on April 12, 2022.

What is the breakdown of the securities in the Freddie Mac SCRT offering?

The SCRT offering consists of approximately $958 million in guaranteed senior certificates and $86 million in unguaranteed subordinate certificates.

How do the seasoned loans in the Freddie Mac SCRT offering perform?

The seasoned loans included in the SCRT offering are either current or no more than 30 days delinquent, indicating a lower risk of default.

Who services the loans in the Freddie Mac SCRT offering?

The loans in the Freddie Mac SCRT offering are serviced by NewRez LLC and Specialized Loan Servicing LLC.