OREANDA-NEWS. Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. Announced today, the K-L series of certificates are backed by large loans on multifamily properties.

The company expects to issue approximately $460.4 million in K Certificates (K-L01 Certificates), which are backed by two large properties located in New York, New York and Irvine, California. The K-L01 Certificates are expected to settle on or about June 6, 2017.

"KL is the latest series under the K-Deal program featuring large loans and demonstrates the continued effort in developing the most efficient securitizations for distributing risk while supporting liquidity in the multifamily market," said Robert Koontz, vice president of Multifamily Capital Markets.

K-L01 Pricing

Class Principal/
Notional Amount (mm)		   Weighted Average Life (Years) Spread (bps) Coupon   Yield   Dollar Price
A-1E $24,872.000   7.34 S + 60 2.8350%   2.6714%   $100.9957
A-2E $217,000.000   9.72 S + 72 3.2880%   2.9251%   $103.0000
XEX $241,872.000   9.48 Non-Offered
A-1P $48,948.000   4.46 S + 43 2.5440%   2.2751%   $100.9982
A-2P $169,585.000   8.39 S + 66 2.7000%   2.7929%   $99.2457
XPK $218,533.000   7.51 Non-Offered

Details

  • Lead Manager and Sole Bookrunner: J.P. Morgan Securities LLC
  • Co-Managers: Academy Securities Inc.; Barclays Capital Inc.; Jefferies LLC; and PNC Capital Markets LLC

The K-L01 Certificates will not be rated, and will include four senior principal and interest classes and two interest-only classes. The K-L01 Certificates are backed by corresponding classes issued by FREMF 2017-KL01 Mortgage Trust (K-L01 Trust) and guaranteed by Freddie Mac. The K-L01 Trust will also issue certificates consisting of Class B-E, class B-P and class R certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-L01 Certificates.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company's business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.