Freddie Mac Prices $1.5 Billion Multifamily K-Deal, K-GS1, Backed by Properties Controlled by Greystar
MCLEAN, VA–(Marketwired – Dec 6, 2017) – Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates) backed by fixed and floating-rate multifamily mortgages with seven and ten-year terms. The approximately $1.5 billion in K Certificates (K-GS1 Certificates) are backed by 34 properties indirectly controlled by Greystar Real Estate Partners or its affiliates. K-GS1 is expected to settle on or about December 20, 2017.
The transaction collateral is part of Freddie Mac’s single-asset, single borrower (SASB) execution. The SASB execution transfers first loss credit risk on either one or multiple properties owned or controlled by a single sponsorship group.
|Class||Principal/Notional Amount (mm)||Weighted Average Life (Years)||Spread / Discount Margin||Coupon||Yield||Dollar Price|
|A-FX||$643.510||9.85||S + 60||3.0000%||2.9758%||100.1624|
|A-FL||$947.916||8.74||36||1 mo LIBOR + 36||1.7381%||100.0000|
- Co-Lead Managers and Bookrunners: J.P. Morgan Securities LLC and Wells Fargo Securities, LLC
- Co-Managers: CastleOak Securities, L.P., Credit Suisse Securities (USA) LLC, Hunt Financial Securities, LLC and Nomura Securities International, Inc.
- The K-GS1 preliminary offering circular supplement:
- Freddie Mac Multifamily Investor Presentation
- Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
The K-GS1 Certificates will not be rated, and will include two senior principal and interest classes, two interest only classes and one class entitled to static prepayment premiums. The K-GS1 Certificates are backed by corresponding classes issued by the FREMF 2017-KGS1 Mortgage Trust (KGS1 Trust) and guaranteed by Freddie Mac. The KGS1 Trust will also issue certificates consisting of the Class B-FL, B-FX, C-FL, C-FX and R Certificates, which will be subordinate to the classes backing the K-GS1 Certificates. The KGS1 Trust Class B-FL, B-FX, C-FL, C-FX 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, 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.