MCLEAN, VA - Freddie Mac announced a new offering of Structured Pass-Through Certificates ("K Certificates"), which are multifamily mortgage-backed securities. The company expects to issue approximately $1.15 billion in K Certificates ("K-037 Certificates"), which are expected to price the week of March 10, 2014, and settle on or about March 25, 2014. This is Freddie Mac's third K Certificates offering this year.
The K-037 Certificates are backed by 102 recently-originated multifamily mortgages and are guaranteed by Freddie Mac. The K-037 Certificates will be offered to the market by a syndicate of dealers led by Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as co-lead managers and joint bookrunners. CastleOak Securities, L.P., J. P. Morgan Securities LLC, Morgan Stanley & Co. LLC, and Credit Suisse Securities (USA) LLC will serve as co-managers.
The K-037 Certificates include two senior principal and interest classes, one senior interest only class and one junior interest only class. Standard and Poor's Ratings Services and DBRS, Inc are rating the three senior classes of K-037 Certificates, which are each expected to receive a rating of "AAA(sf)" and "AAA(sf)," respectively, subject to ongoing monitoring.
The K-037 Certificates are backed by corresponding classes issued by the FREMF 2014-K37 Mortgage Trust ("K-37 Trust") and guaranteed by Freddie Mac. The K-37 Trust will also issue certificates consisting of the Class B, C, D, X2-A, X2-B and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-037 Certificates.
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.
Source: Freddie Mac / #Multifamily #Finance