Last week Freddie Mac announced the launch of its Reference REMIC securities program. This program is aimed at enhancing CMO market liquidity and offering the regular issuance of generic structures with more pricing transparency.

Mark Hanson, vice president in mortgage funding at Freddie, said this new offering borrows a lot from the GSE's Reference Note program on the debt side - which offers very large, liquid, bullet maturity securities with a calendar announcing issuance timing - in terms of the new security's liquidity and predictability. He added that the new REMIC is a throwback to some of the earlier REMIC deals, which were much more straightforward and involved less analytic capabilities to determine the risk and return, thus becoming more appealing to the common investor. The new offerings would be targeted to three different investor groups: asset-backed investors (who typically like shorter maturities), foreign investors and traditional REMIC investors who have been turned off by the lack of liquidity and transparency in the REMIC market.

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