This year’s final STACR SPI deal is its largest at $275 million
MCLEAN, Va., Dec. 13, 2018 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) further reduced its credit risk and enhanced the stability of the U.S. housing market with its fifth and largest Structured Agency Credit Risk (STACR®) - Securitized Participation Interests (STACR SPISM) deal to date.
“In a challenging environment, our final on-the-run STACR SPI transaction drew 17 unique investors,” said Mike Reynolds, vice president of credit risk transfer at Freddie Mac. “We will work to build on that strong interest beginning with our upcoming 2019 deals, as we introduce STACR DNA and HQA in a REMIC structure.”
The $275 million STACR 2018-SPI4 securities are backed by participation interests in 30-year fixed-rate non-HARP mortgage loans with an aggregate principal balance of approximately $6.9 billion and will include retention of the credit risk on loans subsequently refinanced under Freddie Mac’s Enhanced Relief Refinance Program (ERR). Three classes of STACR SPI 2018-4 certificates (M1, M2 and B) were sold. Freddie Mac will retain a 5 percent interest in each of the three classes, maintaining alignment of interests with credit investors.
Pricing for STACR Series 2018-SPI4:
- M-1 class: EDSF plus a spread of 160 bps
- M-2 class: Swaps plus a spread of 350 bps
- B class: $47.50.
Bank of America Merrill Lynch and Barclays Capital, Inc. are co-lead managers and joint bookrunners.
Freddie Mac has led the market in introducing new credit risk-sharing offerings. Since 2013, the company has transferred a portion of credit risk on more than $1 trillion in unpaid principal balance (UPB) on single-family mortgages. It has also grown its investor base to more than 230 unique investors, including insurers and reinsurers. Freddie Mac has a STACR issuance calendar to help investors plan their allocations.
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, 2017, filed with the Securities and Exchange Commission (SEC) on February 15, 2018; 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, 2017, 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, 2017, 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 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.
MEDIA CONTACT: Fred Solomon
INVESTOR CONTACT: Mike Reynolds