SOURCE: Freddie Mac

Freddie Mac

December 08, 2015 17:16 ET

Freddie Mac Prices $867 Million Multifamily K-Deal, K-721

MCLEAN, VA--(Marketwired - Dec 8, 2015) - Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are backed by underlying collateral consisting of fixed-rate multifamily mortgages with predominantly 7-year terms. The company expects to issue more than $867 million in K-721 Certificates, which are expected to settle on or about December 17, 2015. 

K-721 Pricing 

Class   Principal/Notional Amount (mm)   Weighted Average Life (Years)   Discounted Margin   Coupon   Yield   Dollar Price
A1   $68.500   3.8570   56   2.61%   2.0292%   101.9991
A2   $799.020   6.48824   71   3.09%   2.5677%   102.9953
X1   $867.520   5.80264   205   0.4590%   3.8636%   1.9504
X3   $225.424   6.50275   590   1.3384%   7.8354%   6.6627

Details

  • Co-Lead Managers and Joint Bookrunners: Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
  • Co-Managers: Bonwick Capital Partners, LLC, Credit Suisse Securities (USA) LLC,
    Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC
  • Rating Agencies: Kroll Bond Rating Agency, Inc. and Moody's Investors Service, Inc.

Related Links

The K-721 Certificates are backed by corresponding classes issued by the FREMF 2015-K721 Mortgage Trust (K-721 Trust) and guaranteed by Freddie Mac. The K-721 Trust will also issue Class X2-A, X2-B, B, C, D and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-721 Certificates. 

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company's business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.

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.