SOURCE: Freddie Mac

Freddie Mac

February 01, 2016 16:41 ET

Freddie Mac Announces First ACIS® Credit Risk Transaction of 2016 With a $450 Million Limit

MCLEAN, VA--(Marketwired - Feb 1, 2016) - Freddie Mac (OTCQB: FMCC) announced today that it has obtained new insurance policies under its successful Agency Credit Insurance Structure (ACIS®) program. Through ACIS, Freddie Mac obtains insurance policies that transfer to insurance and reinsurance companies around the globe, a portion of the credit risk associated with its Structured Agency Credit Risk (STACR®) debt note reference pools.

This new transaction provides up to a combined maximum limit of approximately $450 million of losses on single-family loans and transfers much of the remaining credit risk associated with the first STACR debt issuance this year, STACR 2016-DNA1.

"We continue to increase the diversity of private capital investors in our credit risk transfer offerings and have built strong relationships with a growing number of ACIS insurers and reinsurers," said Kevin Palmer, senior vice president of Single-Family credit risk transfer for Freddie Mac. "This transaction is supported by the largest panel of insurers and reinsurers to date. ACIS continues to play an important role in our credit risk transfer strategy, and we expect to have these transactions on a regular basis."

Freddie Mac has almost $4 billion in insurance coverage through fifteen ACIS transactions since the program's inception in 2013. 

Freddie Mac has led the market in introducing new risk-sharing initiatives with 18 STACR offerings, two Whole Loan Securities(SM) (WLS(SM)) offerings and 15 ACIS transactions since mid-2013. Through STACR, WLS and ACIS, Freddie Mac has transferred a substantial portion of credit risk on more than $422 billion of UPB on single-family mortgages. Freddie Mac was the first agency to market credit risk transfer transactions with STACR, WLS and ACIS, and the company has since grown its investor base to approximately 190 unique investors, including reinsurers.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.