Freddie Mac said that its guarantee of a $400 million home-equity loan securitization traded at tighter spreads than other home-equity ABS in the market at that the same time.

That news comes as Freddie Mac looks at guaranteeing two more ABS deals totaling more than $1 billion. However, these deals are far from being priced.

The $400 million HEL transaction priced last month by Morgan Stanley Dean Witter Inc. was the third home-equity ABS this year to be partially or entirely guaranteed by Freddie Mac. However, it was the first home-equity transaction Freddie Mac has done with BankBoston NA.

David Borsos, a Freddie Mac director, said that some classes of the most recent Freddie Mac-wrapped deal traded between 10 basis points and 25 basis points tighter than other comparable home-equity classes in the market at the same time. He said the combination of a quality originator like BankBoston and the strength of the Freddie Mac name fueled investor interest.

However, it's nothing new. Earlier Freddie Mac-guaranteed HEL deals, according to Wall Street sources, have also traded tighter than comparable HEL ABS pricing at the same time, in part because Freddie Mac, as a government-sponsored enterprise, has ties to the federal government which gives investors greater comfort.

So far this year, Freddie Mac has put its stamp on between $1 billion and $2 billion in ABS, and since 1995, has guaranteed nine HEL deals. - Ed Staples

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