SOURCE: Freddie Mac

Freddie Mac

September 14, 2015 10:33 ET

Freddie Mac Announces First STACR High LTV Actual Loss Offering, New Pre-Payment Disclosure

MCLEAN, VA--(Marketwired - Sep 14, 2015) - Freddie Mac (OTCQB: FMCC) today further expanded its leading Structured Agency Credit Risk (STACR®) debt notes program by announcing its intention to sell its first actual loss offering of loans with LTVs ranging from 80 to 95 percent (STACR HQA Series), pending market conditions. This is the company's sixth STACR offering this year.

In addition, Freddie Mac will now provide STACR preliminary payment disclosure on the 4th business day of the month following the release of PC disclosures instead of the 25th.

"The STACR market is becoming more sensitive to prepayment speeds, and these changes provide investors with access to the information as soon as possible," said Mike Reynolds, Freddie Mac vice president of Credit Risk Transfer. "Our goal is to be attuned to what the market is looking for and to adjust our disclosures accordingly."

The STACR 2015-HQA1 offering of $872 million will represent the company's third transaction where losses will be allocated based on the actual losses realized on the related reference obligations instead of allocating losses using a fixed severity approach.

With STACR 2015-HQA1, Freddie Mac is issuing 100 basis points of first loss. Freddie Mac holds the senior loss risk in the capital structure and a portion of the risk in the Class M-1, M-2 and M-3, and the first loss Class B tranche.

Bank of America Merrill Lynch and Nomura will serve as co-lead managers and joint bookrunners. Deutsche Bank and BNP Paribas are co-managers, and Williams Capital is a selling group member.

STACR 2015-HQA1 has a reference pool of Single-Family mortgages with an unpaid principal balance of more than $19 billion. The reference pool consists of a subset of 30-year fixed-rate Single-Family mortgages acquired by Freddie Mac between August 1, 2014, and November 30, 2014, with LTVs from 80 to 95 percent.

Freddie Mac will hold an issuer presentation at the ABS East Conference in Miami on Sept. 17, 2015. Freddie Mac leaders will provide updates on its credit risk transfer initiatives, including the award-winning STACR program, and the company's servicing and REO disposition practices.

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, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; 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, 2014, 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. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2014, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.

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 one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.