Freddie Mac announced a new offering of structured passthrough certificates. These multifamily MBS offer liquidity, stability and affordability to the country's multifamily housing market.
The GSE expects to offer about $1.1 billion in K Certificates ("K-005 Certificates") that are expected to price on or around Jan. 27 and settle on or about Feb. 3.
The K-005 Certificates will be co-led by Goldman, Sachs and JPMorgan Securities. Joint bookrunners on the deal are Banc of America Securities, Deutsche Bank Securities and Jefferies & Co.
The K-005 Certificates are backed by 70 recently originated multifamily mortgages that are guaranteed by Freddie Mac.
K Certificates provide Freddie Mac with a new vehicle to securitize multifamily loans, offer the market structured guaranteed securities with stable cash flows that have both structured credit enhancement and the Freddie Mac guarantee. Traditionally, multifamily loans were held in Freddie Mac's mortgage-related investments portfolio.
The agency's most recent K Certificates offering, which was backed by around $1 billion of multifamily loans, settled last Oct. 22.
"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,” 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."