Tenth K-Deal® with Bonds Indexed to SOFR
MCLEAN, Va., July 28, 2020 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The approximately $901 million in K Certificates (K-F82 Certificates) are expected to settle on or about August 6, 2020. The K-F82 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are currently LIBOR-based.
K-F82 includes one class (Class AL) of senior bonds indexed to LIBOR and another class (Class AS) of senior bonds indexed to SOFR. Freddie Mac will provide a basis risk guarantee on Class AS that covers any floating interest rate basis risk if the value of SOFR exceeds the value of LIBOR.
|Class||Principal/Notional Amount (mm)||Weighted Average Life (Years)||Discount Margin||Coupon||Dollar Price|
|AL||$451.517||9.48||37||1 mo LIBOR + 37||100.000|
|AS||$450.000||9.48||42||30-day SOFR avg + 42||100.000|
- Co-Lead Managers and Joint Bookrunners: Morgan Stanley & Co. LLC and Goldman Sachs and Co. LLC
- Co-Managers: BofA Securities, Inc., BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC and Samuel A. Ramirez & Company, Inc.
- The K-F82 preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/kf82oc.pdf
- Freddie Mac Multifamily Securitization Overview
- Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages
The K-F82 Certificates will not be rated, and will include two senior principal and interest classes and one interest-only class that is also entitled to static prepayment premiums. The K-F82 Certificates are backed by corresponding classes issued by the FREMF 2020-KF82 Mortgage Trust (KF82 Trust) and guaranteed by Freddie Mac. The KF82 Trust will also issue certificates consisting of the Class C and R Certificates, which will be subordinate to the classes backing the K-F82 Certificates and 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, 2019, filed with the Securities and Exchange Commission (SEC) on February 13, 2020; 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, 2019, 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. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company’s control. Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and estimates, and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. These assumptions, judgments, estimates and factors are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2019, and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s website at www.sec.gov. The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release. The multifamily investors section of the company’s Web site at https://mf.freddiemac.com/investors/ will also be updated, from time to time, with any information on material developments or other events that may be important to investors, and we encourage investors to access this website on a regular basis for such updated information.
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 undertakes no obligation, and disclaims any duty, to update any of the information in those documents.
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.
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