MCLEAN, VA–(Marketwired – Dec 20, 2017) – Freddie Mac (OTCQB: FMCC) today announced it recently settled its third offering of Multifamily Structured Credit Risk (SCR) Debt Notes, which gives private investors a portion of the credit risk on certain multifamily mortgage loans backing participation certificates (Multi PCs) guaranteed by Freddie Mac and multifamily mortgage loans backing targeted affordable rental housing tax-exempt bonds. The approximately $49.7 million in SCR Notes (pronounced SCORE Notes) settled on December 20, 2017.
Introduced in May 2016, SCR Notes are unsecured and unguaranteed corporate bonds that build on the company’s successful multifamily securities offerings and single-family Structured Agency Credit Risk® debt notes, and reduce taxpayers’ exposure to mortgage default risk. With SCR Notes, the first-loss credit risk of a specified pool of mortgages is transferred to private capital markets credit investors. Freddie Mac retains the senior loss credit risk.
SCR Notes Series 2017-MDN3 Pricing
The $49.7 million SCR Notes Series 2017-MDN3, Class B, is linked to the credit and principal payment risk of a reference pool of multifamily mortgage loans backing Freddie Mac Multi PCs and mortgage loans originated in connection with state and local housing finance agency tax-exempt bonds for which Freddie Mac provides credit enhancement. The SCR Notes are not backed or secured by the reference pool itself. Wells Fargo Securities, LLC and Citigroup Global Markets Inc. are the Co-Lead Managers and Joint Bookrunners. Systima Capital Management is the sole investor for the issued notes.
The amount of periodic principal and ultimate principal paid by Freddie Mac is determined by the performance of the reference pool consisting of approximately 48 multifamily mortgage loans originated between 2008 and 2017 with an approximate unpaid principal balance of $994 million. The mortgage loans were primarily funded multifamily housing, seniors housing and targeted affordable housing loans or the issuance of targeted affordable rental housing tax-exempt bonds guaranteed by Freddie Mac. The loans adhere to Freddie Mac’s underwriting, internal fraud prevention and quality control standards.
This announcement is not an offer to sell any securities of Freddie Mac or any other issuer. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (SEC) on February 16, 2017; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2016, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K.
Freddie Mac’s press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2016, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
Wall St Business News, Latest and Up-to-date Business Stories from Newsmakers of Tomorrow