OREANDA-NEWS. Freddie Mac (OTCQB: FMCC) announces the pricing of the SB16 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $315 million in Multifamily SB Certificates (SB16 Certificates), which are anticipated to settle on or about May 27, 2016. 

SB16 Pricing

Class   Principal/Notional Amount (mm)   Weighted Average Life (Years)   Spread (bps)   Coupon   Yield   Dollar Price
A-5F   $18.701   4.01   S + 60   1.8300%   1.6786%   $100.4848
A-5H   $150.699   4.12   S + 90   2.1300%   1.9893%   $100.4439
A-7F   $9.165   5.51   S + 82   2.1600%   2.0466%   $100.4871
A-7H   $29.808   5.55   Not Available
A-10F   $88.075   7.30   S + 95   2.4300%   2.3459%   $100.4687
A-10H   $18.103   7.36   Not Available
X1   $349.501   5.04   Non-Offered

Details

  • Sole lead manager and bookrunner: J.P. Morgan Securities LLC
  • Co-managers: D.A. Davidson & Co., Duncan-Williams, Inc., Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities, LLC
  • 154 mortgages originated by CBRE Capital Markets, Inc., The Community Preservation Corporation, Greystone Servicing Corporation, Inc., and RED Mortgage Capital, LLC.
  • SB16 Certificates Offering Circular
  • Small Balance Securitization Investor Presentation

Freddie Mac is guaranteeing six senior principal and interest classes and an interest only class of securities issued by the FRESB 2016-SB16 Mortgage Trust and is also acting as mortgage loan seller and master servicer to the trust. In addition to the seven classes of securities guaranteed by Freddie Mac, the trust will issue certificates consisting of the Class B, X2-CB, X2-CP, X2-RC and R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors.

The Small Balance Loan (SBL) origination initiative was first announced in October 2014, and expands the company's continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties. Loans in the program generally range from $1 million to $5 million and are backed by properties with five or more units. Freddie Mac has a specialty network of Seller/Servicers and SBL lenders with extensive experience in this market who source loans across the country.