Freddie Mac Prices Over $1 Billion in Latest STACR Offering
Freddie Mac Prices Over Billion in Latest STACR Offering
MCLEAN, VA–(Marketwired – Nov 3, 2015) – Freddie Mac (OTCQB: FMCC) today priced its seventh Structured Agency Credit Risk (STACR®) debt notes transaction this year, a more than $ 1 billion STACR Series 2015-DNA3 offering. Freddie Mac is successfully bringing private investors back to the Single-Family market and reducing the company’s credit risk exposure through its market-leading credit risk transfer initiatives.
“We have demonstrated our ability to execute credit risk transactions on a regular basis with a standard structure and have been transparent in our disclosures,” said Mike Reynolds, Freddie Mac vice president of Credit Risk Transfer. “Our loans are subject to Freddie Mac’s underwriting standards, internal fraud prevention and quality control review process. We are finding with each issuance that STACR is more diverse, liquid and durable.”
Pricing for STACR Series 2015-DNA3:
- M-1 class was one-month LIBOR plus a spread of 135 basis points.
- M-2 class was one month LIBOR plus a spread of 285 basis points.
- M-3 class was one month LIBOR plus a spread of 470 basis points.
- B class was one month LIBOR plus a spread of 935 basis points.
J.P. Morgan and Morgan Stanley are co-lead managers and joint bookrunners. Barclays and Credit Suisse are co-managers and Loop Capital is a selling group member. The offering is scheduled to settle on or around November 9, 2015.
STACR Series 2015-DNA3 has a reference pool of Single-Family mortgages acquired from December 2014 through March 2015 with an unpaid principal balance of more than $ 34.7 billion. Freddie Mac holds the senior loss risk in the reference pool, and a portion of the risk in the Class M-1, M-2, M-3, and the first loss Class B tranche.
Freddie Mac has led the market in introducing new risk-sharing initiatives with 16 STACR® offerings (including this one) and 11 Agency Credit Insurance Structure (ACIS®) transactions since mid-2013. This is the fourth STACR transaction that provides coverage on an actual loss basis. Through STACR and ACIS, Freddie Mac has laid off a substantial portion of credit risk on more than $ 367 billion of UPB in single-family mortgages. Freddie Mac was the first agency to market credit risk transfer transactions with STACR and ACIS, and has since grown its investor base to more than 170 unique investors, including reinsurers.
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 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.