SOURCE: Freddie Mac

Freddie Mac

October 30, 2014 14:05 ET

Freddie Mac Announces Q-Deal, New Multifamily Securities Offering

MCLEAN, VA--(Marketwired - Oct 30, 2014) - Freddie Mac (OTCQB: FMCC) today announced a new type of Multifamily mortgage- backed security, Q Certificates, which are Structured Pass-Through Certificates (SPC) backed by multifamily loans not underwritten by Freddie Mac at the time of origination but that meet the company's current underwriting standards.

The company expects to issue approximately $189 million in Q Certificates, (Q-001 Certificates), which are expected to price the week of November 3, 2014, and settle on or about November 20, 2014.

The loans were originated by Wells Fargo Bank, National Association, Bank of America, N.A. and JPMorgan Chase Bank, National Association and are being sold by Impact C.I.L., LLC. The loans are backed by properties with rents that are affordable to those with low and very low incomes.

"We are pleased to expand our securitization offerings and expect to execute a few Q-Deals a year," said Mitchell Resnick, vice president of Freddie Mac Multifamily Capital Markets. "In the Q-001 transaction, we are purchasing and guaranteeing the senior bonds, but may purchase certain other bonds in future Q-Deal transactions. The unguaranteed subordinate bonds will continue to be sold to private investors, as is the practice in our K-Deal program.

Resnick added, "Q-Deals feature a range of investor options including guaranteed senior and interest only bonds as well as unguaranteed mezzanine, subordinate and interest only bonds."

The Q-001 Certificates are guaranteed by Freddie Mac and are backed by 124, affordable, multifamily mortgages underwritten by Impact Community Capital. The Q-001 Certificates will be offered to the market by Wells Fargo Securities, LLC.

The Q-001 Certificates include three senior principal and interest classes and two senior interest only classes. Each of the five classes of Q-001 Certificates are expected to receive ratings of "AAA(sp)" from Standard & Poor's Ratings Services and "AAA(sp)" from DBRS, Inc., subject to ongoing monitoring. 

The Q-001 Certificates are backed by corresponding classes issued by the Impact Funding Affordable Multifamily Housing Mortgage Loan Trust 2014-1 and guaranteed by Freddie Mac. The Impact Funding Affordable Multifamily Housing Mortgage Loan Trust 2014-1 Trust will also issue certificates consisting of the Class B, C, D, E, F, G, X-B, X-FX2, Q, R-I and R-II Certificates, which will not be guaranteed by Freddie Mac and will not back any class of Q-001 Certificates. 

The preliminary offering circular supplement relating to the Q-001 Certificates can be found at http://www.freddiemac.com/mbs/data/q001oc.pdf

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, 2013, filed with the Securities and Exchange Commission (SEC) on February 27, 2014; 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, 2013, 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, 2013, 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 homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com. Twitter: @FreddieMac