SOURCE: Freddie Mac

Freddie Mac

February 11, 2014 13:02 ET

Freddie Mac Prices Second Multifamily Securities Offering This Year, K-036

MCLEAN, VA--(Marketwired - Feb 11, 2014) - Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates ("K Certificates"), which are multifamily mortgage-backed securities. The approximately $1.1 billion in K Certificates ("K-036 Certificates") is expected to settle on or about February 20, 2014. This is Freddie Mac's second K Certificates offering this year. 

K-036 Pricing

Class   Principal/
Notional Amount (millions)
  Weighted Average Life (Years)   Spread (bps)   Coupon   Yield   Dollar Price
A-1   $194.823   5.86   S + 47   2.7770%   2.38475%   101.9962
A-2   $865.353   9.55   S + 52   3.5270%   3.27706%   101.9966
X1   $1,060.176   8.66   T +140   0.8021%   3.82308%   6.0238
X3   $194.470   9.46   T +325   2.1101%   5.82054%   15.5322


  • Co-Lead Managers and Joint Bookrunners: J.P. Morgan Securities LLC and Jefferies LLC.
  • Co-Managers: Guggenheim Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and The Williams Capital Group, L.P.
  • Rating Agencies: Fitch Ratings, Inc. and Moody's Investors Service, Inc. are rating the three senior classes of K-036 Certificates, which are each expected to receive a rating of "AAAsf" and "Aaa(sf)," respectively, subject to ongoing monitoring. 

Attribute quote to Mitchell Resnick, vice president of Freddie Mac Multifamily loan pricing and securitization 

  • "We were especially pleased to see the mezzanine tranches being multiple times subscribed. These bonds, along with the subordinate bond, do not carry a Freddie Mac guarantee and are sold to private capital sources, dramatically reducing the risk that Freddie Mac takes in the overall transaction."

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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, 2012, filed with the Securities and Exchange Commission ("SEC") on February 28, 2013; 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, 2012, 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, 2012, 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 and the SEC's Web site at

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. Twitter: @FreddieMac