Freddie Mac is marketing its 20th offering of Structured Agency Credit Risk (STACR) notes offloading exposure to defaults on residential mortgages that it insures.

STACR Debt Notes Series 2016-DNA2 is a $916 million bonds offering  featuring a reference pool of primarily single-family mortgages with an unpaid principal balance of $30 billion. According to a release, Freddie will hold the senior loss risk in the capital structure but is passing along shared risk to investors in the Class M-1, M-2, M-3 and B Bonds within the portfolio.

The deal comes two months after Freddie Mac issued its second STACR deal that featured widened spreads.

Standard & Poor’s has assigned a preliminary ‘BBB’ rating on the $187 million M-1 notes mezzanine tranche, which has 4.15% credit enhancement. The M-2 bonds sized at $198 million carry a ‘BBB-’ rating for a split between exchangeable and interest-only notes and has CE of 3.25%. For the M-3 notes sized at $247 million, the CE is 2.13% for the ‘BB-’ rated tranches; for the ‘B’ rated tranches, only 1%.

The unrated Class B bonds at the bottom of the capital stack total $265 million.

The notes are part of the GSE risk-transfer program mandated by Freddie Mac's regulator, the Federal Housing Finance Agency. (Fannie Mae has a similar risk-transfer program dubbed Connecticut Avenues Securities series.)

The offering is slated to close May 10.

Of the reference pool loans, 86% are backed by primary homes, 9% by investor properties and 5% by secondary homes, according to S&P. The loans were acquired by Freddie Mac from sellers like Wells Fargo Bank and Quicken Loans between July 1 and September 30, 2015.

The average weighted FICO score of the homeowners is 752, with an average loan balance of about $236,000. The 127,400 loans in the pool is less that the two previous two STACR portfolios that had in excess of 147,000 loans.

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