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Freddie Mac Prices $1.3 Billion Multifamily K-Deal Backed by Properties Controlled by Lone Star

Freddie Mac Prices .3 Billion Multifamily K-Deal Backed by Properties Controlled by Lone Star

MCLEAN, VA–(Marketwired – Feb 16, 2016) – 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 $ 1.3 billion in K Certificates (K-LH1 Certificates), which are backed by 28 properties indirectly controlled by Lone Star Real Estate Fund IV (U.S.), L.P. The K-LH1 Certificates are expected to settle on or about February 24, 2016.

K-LH1 Pricing

Class   Principal / Notional Amount (mm)   Weighted Average Life (Years)   Discounted Margin   Coupon   Yield   Dollar Price
A   $ 1,344.298   6.58   70   1 mo LIBOR + 70   1.1025%   $ 100.00
X   $ 1,493.665   6.58   Non-Offered


  • Co-Lead Managers and Joint Bookrunners: Goldman, Sachs & Co. and Wells Fargo Securities, LLC
  • Co-Managers: Citigroup Global Capital Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Samuel A. Ramirez & Company, Inc.

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The K-LH1 Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-LH1 Certificates are backed by corresponding classes issued by the FREMF 2016-KLH1 Mortgage Trust (K-LH1 Trust) and are guaranteed by Freddie Mac. The K-LH1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-LH1 Certificates. The K-LH1 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 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, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; 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, 2014, 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, 2014, 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 Web site at www.sec.gov.

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. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Freddie Mac