Fannie Mae Priced $691 Million Multifamily DUS REMIC (FNA 2021-M13) Under Its GeMS Program

Rhea-AI Summary

Fannie Mae (OTCQB: FNMA) priced a $691 million Multifamily DUS REMIC under its Fannie Mae GeMS program on May 12, 2021. This issuance, FNA 2021-M13, is significant as it marks the first CMBS backed by SOFR-indexed collateral, transitioning away from LIBOR. It includes multiple tranches with unique characteristics aimed at attracting new investors. Fannie Mae has been active in ceasing LIBOR products since 2020 and is preparing for a complete transition by 2023. A detailed breakdown of the tranches and their collateral is provided.

Positive

• Successful pricing of a $691 million Multifamily DUS REMIC.
• First CMBS backed by SOFR collateral, marking a significant transition from LIBOR.
• Introduction of new investment options with a more call-protected A3 tranche.
• Weighted average debt service coverage ratio (DSCR) of 1.88x and 64.95% LTV, indicating strong asset performance.

Negative

• None.

WASHINGTON, May 17, 2021 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) priced a $691 million Multifamily DUS^® REMIC under its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS™) program on May 12, 2021. FNA 2021-M13 marks the sixth Fannie Mae GeMS issuance of 2021.

"With the M13, Fannie Mae marks another milestone in the market's transition away from LIBOR with its first CMBS backed by Secured Overnight Financing Rate (SOFR)-indexed collateral," said Dan Dresser, Senior Vice President, Multifamily Capital Markets & Pricing. "The Group 1 collateral comprises our ARM 7-6 capped, floating-rate product, which has been SOFR-based since late 2020. The M13 also includes two fixed-rate groups of collateral and marks another GeMS program first with an A3 tranche backed by 12-year collateral. The A3 tranche offers a more call-protected option for investors requiring a more predictable maturity window. We continue to look for ways to attract new investors to the DUS and GeMS market and to help transition the market away from LIBOR."

Through external engagement, including participation on the Alternative Reference Rates Committee (ARRC) and its working groups, and internal coordination through dedicated LIBOR transition program offices, Fannie Mae ceased purchasing and issuing LIBOR-based products and launched new SOFR-based offerings in 2020. Fannie Mae will continue to prepare for legacy LIBOR contract conversion in 2023 and will share additional information about its LIBOR transition efforts and milestones to provide full transparency to all stakeholders. For more information on Fannie Mae's LIBOR transition, visit our website and read our FAQs.

All classes of FNA 2021-M13 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal. The structure details for the multi-tranche offering can be found in the table below:

Class	Original Face	Weighted Average Life	Coupon (%)	Coupon Type	Spread	Offered Price
FA	$36,773,762	6.40	0.290	Floater/AFC	30-day SOFR avg +28	99.98
FX	$36,773,762	0.72	0.863	WAC IO	Not Offered	Not Offered
A1	$26,400,000	6.61	1.337	Fixed	S+8	100
A2	$316,963,510	9.83	1.659	WAC	S+14	98.62
X	$26,400,000	6.58	0.322	WAC IO	Not Offered	Not Offered
2A1	$55,000,000	7.19	1.489	Fixed	S+14	100
2A2	$181,198,967	11.64	1.684	WAC	S+22	96.45
2A3	$75,000,000	11.83	1.460	Fixed	Not Available	Not Available
X2	$55,000,000	7.18	0.195	WAC IO	Not Offered	Not Offered
X3	$75,000,000	11.33	0.224	WAC IO	Not Offered	Not Offered
Total	$691,336,239

 

Group 1 Collateral
UPB:	$36,773,762
Collateral:	10 Fannie Mae DUS MBS
Geographic Distribution:	MI (22.3%), LA (17.2%), AL (16.6%)
Weighted Average Debt Service Coverage Ratio (DSCR):	1.88x
Weighted Average Loan-to-Value (LTV):	64.95%
Group 2 Collateral
UPB:	$343,363,510
Collateral:	26 Fannie Mae DUS MBS
Geographic Distribution:	NY (27.9%), TN (21.1%), PA (18.5%)
Weighted Average Debt Service Coverage Ratio (DSCR):	1.76x
Weighted Average Loan-to-Value (LTV):	64.19%
Group 3 Collateral
UPB:	$311,198,967
Collateral:	57 Fannie Mae DUS MBS
Geographic Distribution:	TX (16.8%), NH (16.1%), FL (10.8%)
Weighted Average Debt Service Coverage Ratio (DSCR):	1.33x
Weighted Average Loan-to-Value (LTV):	71.69%

 

For additional information, please refer to the Fannie Mae GeMS REMIC Term Sheet (FNA 2021-M13) available on the Fannie Mae GeMS Archive page.

About Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:
fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

Fannie Mae Newsroom
https://www.fanniemae.com/newsroom

Photo of Fannie Mae
https://www.fanniemae.com/resources/img/about-fm/fm-building.tif

Fannie Mae Resource Center
1-800-2FANNIE

Certain statements in this release may be considered forward-looking statements within the meaning of federal securities laws. In addition, not all securities will have the characteristics discussed in this release. Before investing in any Fannie Mae issued security, you should read the prospectus and prospectus supplement pursuant to which such security is offered. You should also read our most current Annual Report on Form 10-K and our reports on Form 10-Q and Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC") available on the Investor Relations page of our Web site at www.fanniemae.com and on the SEC's Web site at www.sec.gov.

View original content:http://www.prnewswire.com/news-releases/fannie-mae-priced-691-million-multifamily-dus-remic-fna-2021-m13-under-its-gems-program-301292926.html

SOURCE Fannie Mae

FAQ

What is the significance of Fannie Mae's recent REMIC issuance FNMA on May 12, 2021?

The issuance of FNA 2021-M13 is significant as it is Fannie Mae's first CMBS backed by SOFR-indexed collateral, marking a transition away from LIBOR.

How much did Fannie Mae raise in the May 2021 REMIC pricing?

Fannie Mae raised $691 million through the pricing of the Multifamily DUS REMIC.

What is the weighted average debt service coverage ratio of Fannie Mae's recent REMIC?

The weighted average debt service coverage ratio (DSCR) for the recent REMIC is 1.88x.

What does the transition from LIBOR to SOFR mean for Fannie Mae's investors?

The transition from LIBOR to SOFR means that Fannie Mae is adopting a more stable benchmark rate, which could lead to more predictable investment returns.

What are the key features of the A3 tranche in Fannie Mae's recent REMIC?

The A3 tranche offers a more call-protected option for investors, backed by 12-year collateral, providing a more predictable maturity window.