Freddie Mac Prices $1 Billion Multifamily Aggregation Risk Transfer Certificates, Series 2017-KT02

MCLEAN, VA--(Marketwired - Nov 27, 2017) - Freddie Mac (OTCQB: FMCC) today announced its offering of the Multifamily Aggregation Risk Transfer Certificates, Series 2017-KT02 (KT02 Certificates), which will be backed by multifamily mortgage loans that are awaiting sale into K-Series securitizations. This offering of $1 billion in KT02 Certificates is expected to settle on or about November 29, 2017 and is the second offering of Multifamily Aggregation Risk Transfer Certificates (KT Certificates) this year.

KT Certificates are designed to transfer a portion of the credit risk associated with eligible multifamily mortgage loans to certain investors prior to sale into K-Series securitizations. KT02 is designed to transfer the risk on multifamily mortgages that are in their lease up period (Lease Up Loans), which occurs before the collateral is fully stabilized. The initial pool contains 23 Lease Up Loans. After the closing date, Freddie Mac may also include loans backed by student and seniors housing in the pool. 

On the settlement date, Freddie Mac will sell to the FMPRE 2017-KT02 Multifamily Aggregation Risk Transfer Trust (KT02 Trust) approximately $1 billion in eligible mortgage loans. During a 42-month revolving period Freddie Mac will purchase mortgage loans eligible for repurchase from the KT02 Trust for inclusion in K-Series securitizations and replace them with additional eligible mortgage loans. 

The KT Trust will issue Class A, B, C, D and E Certificates. Freddie Mac will guarantee timely payment of interest, reimbursement of realized losses and ultimate repayment of principal on the Class A Certificates but will not guarantee the Class B, C, D or E Certificates. Freddie Mac will purchase the Class A and E Certificates.

"Our second offering of KT Certificates illustrates our continued leadership in innovative risk distribution," said William Buskirk, chief financial officer for Freddie Mac Multifamily. "With this KT offering, we have developed a new and innovative structure that transfers first loss risk during the aggregation period to the private sector."

"This offering continues our efforts to develop products that not only meet the needs of our investors, but also move risk away from Freddie Mac and the American taxpayer," said Robert Koontz, vice president of multifamily capital markets. "By transferring the lease up risk on these properties, KT02 marks yet another innovation on this front."

KT02 Certificates Pricing
Class		Principal/Notional Amount (mm)		Assumed Weighted Average Life (Years)
A		$900.000		3.99
B		$25.000		3.99
C		$37.500		3.99
D		$37.500		3.99

Details

• Lead Manager and Bookrunners: Barclays Capital Inc. and Wells Fargo Securities, LLC
• Co-Manager for Class A Certificates: Academy Securities Inc.

Related Links

• KT02 Offering Circular Supplement http://www.freddiemac.com/mbs/data/kt02oc.pdf
• Freddie Mac Multifamily Investor Presentation [pdf]
• Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages

This announcement is not an offer to sell any securities of Freddie Mac or any other issuer. 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, 2016, filed with the Securities and Exchange Commission (SEC) on February 16, 2017; 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, 2016, 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, 2016, 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 http://www.FreddieMac.com/investors and the SEC's Web site at http://www.sec.gov.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.