$348 Million Senior/Sub Credit Risk Offering
MCLEAN, VA--(Marketwired - Jul 20, 2016) - Freddie Mac (OTCQB: FMCC) announced the pricing of its third
Freddie Mac Whole Loan Securities(SM) (WLS(SM)), an offering of approximately $348 million of guaranteed senior and non-guaranteed subordinate actual loss securities.
By shifting some of its credit risk from the underlying super-conforming mortgages to subordinate investors, WLS is another important offering in Freddie Mac's single-family credit risk transfer program. WLS preserves many of the features found in Freddie Mac Gold PC's while leveraging traditional private label characteristics. To date, the company has issued nearly $1.3 billion in WLS.
"We are pleased to bring our third WLS transaction to market and have seen strong investor interest," said Kevin Palmer, senior vice president of Freddie Mac Credit Risk Transfer. "We expect to be a regular issuer of WLS going forward."
Freddie Mac Whole Loan Securities Trust, Series 2016-SC01, a Freddie Mac trust, will issue approximately $327 million in guaranteed senior certificates and approximately $21 million in unguaranteed subordinate certificates. The collateral backing the certificates are 661 fixed-rate super conforming loans.
Bank of America Merrill Lynch and Barclays are co-lead managers and joint bookrunners. WLS 2016-SC01 is expected to settle later this month.
Freddie Mac has led the market in introducing new risk-sharing initiatives with STACR, Whole Loan Securities(SM) (WLS(SM)) and ACIS, and was the first agency to market these types of credit risk transfer transactions. The company has since grown its investor base to more than 200 unique investors, including insurers and reinsurers. Since 2013, the company has transferred a substantial portion of credit risk on more than $500 billion of UPB on single-family mortgages. Additional information about the company's single-family risk sharing offerings is at http://www.freddiemac.com/creditriskofferings/.
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, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; 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 approximately 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.