Freddie Mac announced today a new offering of Structured Pass-Through Certificates ("K Certificates"), multifamily mortgage-backed securities.
The company expects to offer approximately $1.0 billion in K Certificates ("K-015 Certificates"), which are expected to price this week or the week of October 24, 2011, and settle on or about November 9, 2011.
The K-015 Certificates will be offered to the market by a syndicate of dealers led by Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as co-lead managers and joint bookrunners for the transaction. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC will serve as co-managers for the transaction.
The K-015 Certificates include two classes of senior principal and interest classes, a senior interest only class and a junior interest only class. A new feature of this offering is that Fitch, Inc. and DBRS, Inc. have been engaged to rate the three senior classes of K-015 Certificates, which are expected to receive ratings of "AAA" from each agency, subject to on-going monitoring.
The K-015 Certificates are backed by 91 recently-originated multifamily mortgages and are guaranteed by Freddie Mac. This is the tenth K Certificate offering this year. K Certificates provide Freddie Mac with an efficient vehicle to securitize multifamily loans. The certificates provide investors with stable cash flows, structured credit enhancement and the Freddie Mac guarantee.