OREANDA-NEWS. Freddie Mac (OTCQB: FMCC) yesterday priced its second Structured Agency Credit Risk (STACR®) transaction this year, STACR 2016-HQA1. Through the award-winning and innovative STACR program, Freddie Mac transfers a portion of its credit risk on certain single-family loans to private capital market investors.

"We saw secondary spreads tighten with this transaction," said Mike Reynolds, vice president of Credit Risk Transfer for Freddie Mac. "This may be the reversal of spreads widening."

Pricing for STACR Series 2016-HQA1:

  • M-1 class was one-month LIBOR plus a spread of 175 basis points.
  • M-2 class was one month LIBOR plus a spread of 275 basis points.
  • M-3 class was one month LIBOR plus a spread of 635 basis points.
  • B class was one month LIBOR plus a spread of 1,275 basis points.

With the $475 million STACR 2016-HQA1 offering of loans with LTVs ranging from 80 to 95 percent, Freddie Mac holds the senior loss risk in the capital structure and a portion of the risk in the Class M-1, M-2 and M-3 tranches, and the first loss Class B tranche.

Barclays and Wells Fargo Securities are co-lead managers and joint bookrunners. Cantor Fitzgerald, Deutsche Bank Securities, J.P. Morgan and Nomura are co-managers. Ramirez and Co., Inc. is the selling group member.

STACR 2016-HQA1 has a reference pool of single-family mortgages with an unpaid principal balance of more than $17.5 billion. The reference pool consists of a subset of 30-year fixed-rate single-family mortgages acquired by Freddie Mac between April 1, 2015 and June 30, 2015.