MCLEAN, VA -- (Marketwired) -- 01/31/17 -- Freddie Mac (OTCQB: FMCC) today priced a $802 million Structured Agency Credit Risk (STACR®) debt notes offering, the first low LTV deal of the year. Through STACR, its flagship credit risk transfer offering, Freddie Mac transfers a significant portion of its mortgage credit risk on certain groups of loans to private investors.
Pricing for STACR Series 2017-DNA1:
- M-1 class was one-month LIBOR plus a spread of 120 basis points.
- M-2 class was one month LIBOR plus a spread of 325 basis points.
- B-1 class was one month LIBOR plus a spread of 495 basis points.
- B-2 class was one month LIBOR plus a spread of 1,000 basis points.
"We had a strong start to 2017, with lots of investor demand. We're looking forward to the next transaction," said Michael Reynolds, vice president of credit risk transfer.
STACR 2017-DNA1 has a reference pool of single-family mortgages with an unpaid principal balance (UPB) of approximately $33.9 billion, consisting of a subset of fixed-rate, single-family mortgages with an original term of 241 to 360 months acquired by Freddie Mac between April 1, 2016, and June 30, 2016. With the offering of loans with LTVs ranging from 60 to 80 percent, Freddie Mac holds the senior loss risk in the capital structure and a portion of the risk in the Class M-1, M-2 and B-1 tranches, and also a significant portion of the first loss in the B-2 tranche.
Barclays and Goldman, Sachs & Co. are co-lead managers and joint bookrunners.
Freddie Mac has led the market in introducing new credit risk-sharing offerings with STACR, Agency Credit Insurance Structure (ACIS®) and Whole Loan Securities (WLS(SM)). 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 significant portion of credit risk on approximately $636 billion of UPB on single-family mortgages. 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, 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, 2015, 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, 2015, 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 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.