MCLEAN, VA--(Marketwired - Dec 21, 2016) - Freddie Mac (OTCQB: FMCC) today announced the settlement of its first Freddie Mac Seasoned Credit Risk Transfer (SCRT) offering -- a rated, securitization of approximately $934 million of guaranteed senior and unguaranteed subordinate securities. SCRT builds on the company's leadership in transferring mortgage credit risk to the private market.
The SCRT securitization program is a key part of Freddie Mac's seasoned loan offerings to reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk via economically reasonable transactions.
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2016-1 will issue approximately $715 million in guaranteed senior certificates and approximately $220 million in unguaranteed mezzanine and subordinate certificates. The collateral backing the certificates are 4,064 fixed- and step-rate modified seasoned loans. These loans were modified to assist borrowers who were at risk of foreclosure to help them keep their homes and have all been performing for at least 37 months as of issuance.
The loans will be serviced by Select Portfolio Servicing, Inc. The servicing of the loans will be in accordance with requirements similar to those applicable to the sale of non-performing loans (NPLs), which potentially improve borrower outcomes in the event of a default and promote neighborhood stability.
Advisors to Freddie Mac on this transaction are Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC as co-lead advisors and joint bookrunners. Merrill Lynch, Piece, Fenner & Smith Incorporated and Citigroup Global Markets Inc. are co-managers, and The Williams Capital, L.P. is a selling group member.
In addition to this transaction and a pilot RPL Structured Sale transaction that closed October 28, 2016, Freddie Mac has sold $7 billion in nonperforming loans (NPLs) and securitized $26 billion in re-performing loans (RPLs) via fully guaranteed securitizations to date. Additional information about the company's seasoned loan offerings is at http://www.freddiemac.com/seasonedloanofferings/index.html.
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, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; 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, 2015, 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, 2015, 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 website at www.FreddieMac.com/investors and the SEC's website.
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 approximately 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.