Freddie Mac to Offer Multifamily Securities

Freddie Mac to Offer Multifamily Securities MCLEAN, VA - Freddie Mac announced a new offering of Structured Pass-Through Certificates ("K Certificates"), multifamily mortgage-backed securities. The company expects to offer approximately $538 million in K Certificates ("K-AIV Certificates"), which are backed by 19 multifamily properties owned by Apartment Investment & Management Company (NYSE: AIV) affiliates. The K Certificates are expected to price the week of May 23, 2011, and settle on or about June 9, 2011.

The K-AIV Certificates will be offered to the market by a syndicate of dealers led by Bank of America Merrill Lynch and J.P. Morgan Securities LLC as co-lead managers and joint bookrunners for the transaction. Barclays Capital Inc. and Jefferies & Company, Inc. have been named co-managers for the transaction.

"We are very pleased to offer this new K deal, the first one backed by multiple loans from a single borrower. We expect to periodically issue these types of deals and others with loans from a single property and/or single borrower. It's the continuing evolution of K deals, which includes loans on conventional, student, senior and targeted affordable multifamily properties," said David Brickman, national head of Multifamily and CMBS Capital Markets for Freddie Mac. The first single loan K Certificate from a single borrower was the March 2010 K-SCT transaction backed by the Starrett City property in Brooklyn.

The K-AIV Certificates are backed by 19 recently-originated multifamily mortgages and are guaranteed by Freddie Mac.

Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities and has brought to market six K deals this year, including K-AIV, with an issuance size of about $1 billion each. K-deals feature a wide range of investor options with stable cash flows and a structured credit enhancement. K-deals include guaranteed senior and interest only classes. The related underlying private label trust includes unguaranteed mezzanine, subordinate and interest only bonds.

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. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Source: Freddie Mac

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