MCLEAN, VA--(Marketwired - Jan 13, 2016) - Freddie Mac (OTCQB: FMCC) recently priced its first Structured Agency Credit Risk (STACR®) debt notes offering this year of $996 million. Through the STACR program, Freddie Mac transfers a portion of its credit risk on certain Single-Family loans to private capital markets investors.
Pricing for STACR Series 2016-DNA1:
- M-1 class was one-month LIBOR plus a spread of 145 basis points.
- M-2 class was one month LIBOR plus a spread of 290 basis points.
- M-3 class was one month LIBOR plus a spread of 555 basis points.
- B class was one month LIBOR plus a spread of 1,000 basis points.
"We are quickly starting off the year with an issuance and expect to have eight STACR offerings through October as reflected in our published deal calendar pdf," said Mike Reynolds, vice president of Freddie Mac Credit Risk Transfer. "With current market conditions we are pleased to sell a billion dollars of credit bonds and believe it reflects investors' positive view of the company's credit fundamentals."
Bank of America Merrill Lynch and J.P. Morgan are co-lead managers and joint bookrunners. Barclays, Citigroup, Credit Suisse and Wells Fargo are co-managers, and Williams Capital is a selling group member. The offering is scheduled to settle on or around January 21, 2016.
STACR Series 2016-DNA1 has a reference pool of recently-acquired Single-Family mortgages with an unpaid principal balance of more than $35.7 billion. Freddie Mac holds the senior loss risk in the capital structure, and a portion of the risk in the Class M-1, M-2, M-3, and B Bonds.
Freddie Mac has led the market in introducing new risk-sharing initiatives with 17 STACR offerings, two Whole Loan Security(SM) (WLS(SM)) offerings and 14 ACIS transactions since mid-2013. Through STACR, WLS and ACIS, Freddie Mac has transferred a substantial portion of credit risk on more than $385 billion of UPB in Single-Family mortgages. Freddie Mac was the first agency to market credit risk transfer transactions with STACR, WLS and ACIS, and the company has since grown its investor base to approximately 190 unique investors, including reinsurers.
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, 2014, filed with the Securities and Exchange Commission (SEC) on February 19, 2015; 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, 2014, 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, 2014, 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 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. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available 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.