A New Milestone in Agency Credit Risk Transfer
MCLEAN, VA--(Marketwired - Jan 5, 2018) - Freddie Mac (OTCQB: FMCC) today announced it has issued a record-setting $68 billion in multifamily securities in 2017, effectively transferring the majority of risk from taxpayers to private investors. This milestone sets Freddie Mac apart as an industry leader, through its numerous offerings of high-grade multifamily securities.
"Through our established offerings, and a variety of innovations, we transferred more risk away from the U.S. taxpayer than ever before," said David Brickman, executive vice president and head of Freddie Mac Multifamily. "Thanks to strong support from our investors, and the dedicated Freddie Mac staff, our flagship K- and SB-Deals both had exceptional years. In 2017, we continued to build on that success with new securitization and risk-transfer vehicles that helped us adapt to changing investor demands, lowered the cost of capital for properties and, as a result, made renting more affordable."
Contributing to the more than $68 billion total securitization, the company settled:
- More than $56.7 billion in K-Deals
- $5.5 billion in SB-Deals
- $2.0 billion in KT-Deals
- $656 million in ML-Deals
- More than $3.2 billion in Q-Deals, M-Deals, Participation Certificates, SR-Deals and SCR Notes
"We had an excellent 2017 -- our issuance calendar was robust and bond spreads tightened over the course of the year. Moreover, nearly a decade after K3, a landmark transaction in our K-Series, we continue to expand our securitization platform and offer new ways to transfer risk to private investors," said Robert Koontz, vice president of Capital Markets at Freddie Mac Multifamily. "Simply put, our success was not possible without our investors and, of course, the best staff in the business. Thank you for another amazing year."
2017 saw the announcement of several new credit risk-transfer vehicles. Among others, these included the ML-Deal, the first-ever securitization of a tax-exempt loan portfolio; the KT-Deal, which transfers the credit risk on loans awaiting sale into other K-Series securitizations; the TEL Multi PC, the first pass-through securities backed by tax-exempt loans; and a number of innovative single-asset, single-borrower executions. These innovations were successfully added while maintaining excellent credit quality.
Brickman added, "In 2018, we anticipate several new offerings, allowing us to continue serving our customers in an efficient, cost-effective manner, protecting taxpayers and bringing quality and affordability to the millions of American renters we serve."
In 2017, 392 different investors participated in Freddie Mac's K- and SB-Deal programs, including 268 in the K-Deal program and 174 in the SB-Deal program. An average of nearly 30 investors participated in each K- and SB-Deal. Since the inception of the modern K-Deal in 2009, the company securitized a total of $254 billion across all offerings, including $232 billion in K-Deals and $11 billion in SB-Deals. Since 2009, more than 650 different investors have participated in Freddie Mac's K-and SB-Deal programs, including 500 in the K-Deal program and over 225 in the SB-Deal program.
Freddie Mac Multifamily is the nation's multifamily housing finance leader. Historically, nearly 90 percent of the eligible rental units we fund are affordable to families with low-to-moderate incomes.
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.
The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.