Freddie Mac Announces First Offerings of Multi PCs Backed by Tax-Exempt Loans
MCLEAN, VA–(Marketwired – Dec 12, 2017) – Freddie Mac (OTCQB: FMCC) today announced the external offering of two Multifamily Participation Certificate pass-through securities backed by tax-exempt loans (TEL Multi PCs), where the underlying tax-exempt loans are made by state or local housing agencies and secured by affordable rental housing. It is the first time TEL Multi PCs have been offered by Freddie Mac. They are designed to help source the lowest cost of capital to deliver even more efficient financing for affordable housing through Freddie Mac’s Tax-Exempt Loan program.
The company announced the pricing of two separate single-class securities each backed by one fixed-rate, multifamily tax-exempt loan. The first, WE0001, is backed by a loan totaling approximately $3.9 million. The second, WE2001, is backed by a loan totaling approximately $2.9 million. Both are expected to settle on December 15, 2017.
“Participation Certificates are designed to reduce our retained portfolio and to provide an outlet for the small amount of loans that are not part of our K-Deal program,” said Victor Pa, Vice President of Investments and Advisory at Freddie Mac. “With these offerings, we are transferring risk away from taxpayers while bringing liquidity to affordable housing projects more efficiently and at lowest costs.”
“Our tax-exempt loan products provide cost-effective financing for multifamily developers, which helps keep rental housing affordable for lower-income families,” said David Leopold, Vice President for Affordable Housing Production and Investments at Freddie Mac Multifamily. “As with other innovations we’ve rolled out this year, this new offering will enhance our ability to lower the cost of capital, which will allow us to deliver even more efficient financing for affordable housing through our TEL program.”
The TEL Multi PCs will be offered to the market through Stifel, Nicolaus & Company, Inc., as placement agent. Each TEL Multi PC features Freddie Mac’s guarantee of timely payment of interest and scheduled principal. Freddie Mac completes the underwriting and credit reviews for all loans. Securitized loans are underwritten to the same standards as loans held in the company’s portfolio. The TEL Multi PC timeline is consistent with industry standards and is the duration between the mortgage payment date and the security payment date.
The TEL Multi PC Offering Circular Supplements:
- WE0001: http://www.freddiemac.com/mbs/data/we0001os.pdf
- WE2001: http://www.freddiemac.com/mbs/data/we2001os.pdf
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 Web site at www.sec.gov.
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.