Wednesday, Freddie Mac (FRE) said it would make an offering of $1.1 billion of Structured Pass-Through Certificates known as "K Certificates" later this month. The company said pricing for the multifamily mortgage-backed securities is expected on or about January 27, and settle on February 3.
According to the company, the K-005 Certificates will be offered to the market by a network of dealers led by Goldman, Sachs & Co. and J.P. Morgan Securities Inc. as Co-Lead Managers and Joint Bookrunners for the transaction. Banc of America Securities LLC, Deutsche Bank Securities Inc. and Jefferies & Company, Inc. have been named as Co-Managers for the transaction.
The certificates are backed by 70 recently originated multifamily mortgages and are guaranteed by Freddie Mac. The loans were originated using Freddie Mac's Capital Markets Execution product.
K Certificates provide the company with a new vehicle to securitize multifamily loans, offer the market structured guaranteed securities with stable cash flows and with both structured credit enhancement and the Freddie Mac guarantee.
Freddie Mac was established by the Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Over the years, the company has made home possible for one in six home-buyers and more than five million renters. Traditionally, multifamily loans were held in Freddie Mac's mortgage-related investments portfolio. The company's most recent K Certificates offering, backed by approximately $1 billion of multifamily loans, settled on October 22, 2009.
FRE is currently trading at $1.38, on a volume of 5.04 million shares, on the New York Stock Exchange.
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