SOURCE: Freddie Mac

Freddie Mac

May 03, 2017 14:59 ET

Freddie Mac Settles Second Seasoned Credit Risk Transfer Offering

$1.12 Billion Securitization of Nearly 4,400 Performing Modified Loans

MCLEAN, VA--(Marketwired - May 3, 2017) - Freddie Mac (OTCQB: FMCC) today announced the settlement of its second Freddie Mac Seasoned Credit Risk Transfer (SCRT) offering -- a rated, securitization of approximately $1.12 billion of both guaranteed senior and unguaranteed subordinate securities. SCRT builds on the company's leadership in transferring mortgage credit and market risk to the private market on seasoned and distressed residential mortgage loans.

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 2017-1 will issue approximately $926 million in guaranteed senior certificates and approximately $190 million in unguaranteed mezzanine and subordinate certificates. The collateral backing the certificates are 4,361 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 12 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 prioritize borrower retention options in the event of a default and promote neighborhood stability.

Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated served as co-lead managers and joint bookrunners. Wells Fargo Securities, LLC and Citigroup Global Markets Inc. are co-managers, and The Williams Capital, L.P. is a selling group member.

To date, Freddie Mac has sold $7 billion in nonperforming loans (NPLs), securitized $26 billion in re-performing loans (RPLs), and transacted $2 billion in structured offerings. 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, 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 www.FreddieMac.com/investors and the SEC's website.

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.

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