Freddie Mac has announced a new offering of multifamily mortgage-backed securities known as Structured Pass-Through Certificates (K Certificates).
The company expects to offer approximately $1.1 billion in K Certificates (K-005 Certificates), which are anticipated to price on or about Jan. 27 and settle on or about Feb. 3.
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 & Co. Inc. have been named as co-managers for the transaction. The K-005 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 (CME) product.
"We are very excited and pleased with the rapid growth of our Capital Markets Execution product and our ability to ring in the new year with the offering of our third series of K Certificates backed by CME mortgages," comments David Brickman, vice president of multifamily and CMBS capital markets for Freddie Mac. "While this is our first deal in 2010, given our pipeline, we expect to come to market every other month throughout 2010 with new deals, and thereby continue to provide greater liquidity to the multifamily housing market."
K Certificates provide Freddie Mac with a new vehicle to securitize multifamily loans, offer the market structured guaranteed securities with stable cashflows and with both structured credit enhancement and the Freddie Mac guarantee, the company says.
Traditionally, multifamily loans were held in Freddie Mac's mortgage-related investments portfolio. Freddie Mac's most recent K Certificates offering, backed by approximately $1 billion of multifamily loans, settled on Oct. 22, 2009.
The preliminary offering circular supplement relating to the K-005 Certificates can be found here.
SOURCE: Freddie Mac