SOURCE: Freddie Mac

Freddie Mac

January 09, 2015 16:30 ET

Freddie Mac Reduces Credit Risk With Three New ACIS Insurance Policies With a Combined $707 Million Limit

MCLEAN, VA--(Marketwired - Jan 9, 2015) - Freddie Mac (OTCQB: FMCC) announced today its first three Agency Credit Insurance Structure (ACIS) transactions of 2015, where it obtained a number of insurance policies as part of the company's continued efforts to transfer credit risk to private capital market investors and global reinsurers. These three transactions transfer much of the remaining credit risk associated with three STACR deals executed in 2014 -- up to a combined maximum limit of approximately $707 million of losses on pools of Single-Family loans acquired in 2013 and the first quarter of 2014.

"The three ACIS executions right out of the gate this year reinforces our commitment to programmatic and efficient transactions," said Kevin Palmer, vice president of Freddie Mac's Single-Family strategic credit costing and structuring. "Combined with our ACIS transaction in December, we have now acquired more than $860 million in additional insurance coverage since our last STACR transactions in October 2014. Similar to previous deals, this transaction also includes new participants as we continue to mature and further expand our panel of counterparties."

Freddie Mac has led the market in introducing new risk-sharing initiatives with nine STACR debt note offerings and now seven ACIS transactions since mid-2013. Through STACR and ACIS, Freddie Mac has laid off a substantial portion of credit risk on more than $205 billion of UPB in Single-Family mortgages.

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.