OREANDA-NEWS. Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.2 billion in K Certificates (K-LH2 Certificates), which are backed by 26 properties indirectly controlled by Lone Star Real Estate Fund IV (U.S.), L.P. The K-LH2 Certificates are expected to settle on or about March 23, 2016.

 
K-LH2 Pricing
Class Principal/ Notional Amount (mm) Weighted Average Life (Years) Discounted Margin Coupon Yield Dollar Price
A $1,241.838 6.49 70 1 mo LIBOR + 70 1.1025% $100.00
X $1,379.820 6.49 Non-Offered
       

Details

  • Co-Lead Managers and Joint Bookrunners: Goldman, Sachs & Co. and Wells Fargo Securities, LLC
  • Co-Managers: Barclays Capital, Inc., CastleOak Securities, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated

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The K-LH2 Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-LH2 Certificates are backed by corresponding classes issued by the FREMF 2016-KLH2 Mortgage Trust (K-LH2 Trust) and are guaranteed by Freddie Mac. The K-LH2 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-LH2 Certificates. The K-LH2 Trust Class B, C and R Certificates will not be guaranteed by Freddie Mac.

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 securities of Freddie Mac or any other issuer. 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, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; 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, 2015, 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 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 the largest source of financing for multifamily housing.