Freddie Mac Prices Approximately $772 Million SLST Securitization

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced its second Seasoned Loans Structured Transaction Trust (SLST) offering of 2021, securitizing approximately $772 million of seasoned re-performing loans (RPLs). The structured transaction includes about $687 million in guaranteed senior certificates and $85 million in non-guaranteed subordinate certificates. This move aims to reduce less-liquid assets in Freddie Mac's mortgage-related investments and mitigate credit and market risk. The transaction is set to settle on July 29, 2021.

Positive

• Securitization of $772 million in seasoned re-performing loans boosts liquidity.
• Reduction of less-liquid assets improves financial stability.
• Transaction involves guaranteed senior certificates, reducing credit risk.

Negative

• None.

MCLEAN, Va., July 21, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced pricing of the second Seasoned Loans Structured Transaction Trust (SLST) offering of 2021—a securitization of approximately $772 million including both guaranteed senior and non-guaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs). The SLST 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 SLST Series 2021-2 includes approximately $687 million in guaranteed senior certificates and approximately $85 million in non-guaranteed subordinate certificates. The right to purchase the subordinate certificates was awarded on July 19 via an auction. The transaction is expected to settle on July 29, 2021.

The underlying collateral backing the certificates consists of 5,139 fixed-, adjustable-, and step-rate seasoned RPLs, the majority of which were previously modified to assist borrowers.

The loans are currently serviced by Select Portfolio Servicing, Inc. (“SPS”) and Community Loan Servicing, LLC (“CLS”) in accordance with requirements that prioritize borrower retention options in the event of default and promote neighborhood stability.

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

To date, Freddie Mac has sold almost $9 billion of Non-Performing Loans (NPLs) and securitized approximately $73 billion of RPLs consisting of $30 billion of fully guaranteed PCs, $32 billion of SCRT senior/sub securitizations, and almost $11 billion of Seasoned Loans Structured Transaction (SLST) offerings. 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, 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 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 purpose of Freddie Mac's SLST offering?

The SLST offering aims to securitize seasoned re-performing loans to enhance liquidity and reduce less-liquid assets in Freddie Mac's mortgage-related investment portfolio.

How much money is involved in the SLST transaction?

Freddie Mac's SLST transaction is priced at approximately $772 million, including both guaranteed and non-guaranteed securities.

When will the Freddie Mac SLST transaction settle?

The SLST transaction is expected to settle on July 29, 2021.

What types of loans back the Freddie Mac SLST offering?

The SLST offering is backed by a pool of 5,139 seasoned re-performing loans, primarily fixed-, adjustable-, and step-rate loans.

Who are the advisors for Freddie Mac's SLST transaction?

The advisors for the SLST transaction include Wells Fargo Securities and BofA Securities as co-lead managers, along with other co-managers.