Freddie Mac's second offering of STACR risk sharing notes of 2014 priced at signifcantly tighter spreads across the credit curve than its first deal, issued in February.
The notes were oversubscribed and as a result the deal was upsized to around $1 billion from $966 million, according to an Interactive Data report.
The deal, STACR 2014-DN2, is structrued similarly to the STACR 2014-DN1 transaction. The M1 notes, rated single-A, priced at 85 basis points over one-month Libor, according to a press release issued by the GSE. The M2 notes, rated triple-B, priced at 165 basis points over one-month Libor, and the unrated M3 notes priced at 360 basis points over one-month Libor. The press release did not indicate the tenor of each tranche.
Freddie Mac’s February deal, also offered three tranches -- M1, M2 and M3 that were rated at the same level as the current deal. Pricing for the STACR Debt Notes, Series 2014 DN1 M-1 class was 100 basis points over one-month Libor. Pricing for the M-2 class was one month LIBOR plus a spread of 220 basis points. Pricing for the M-3 class was one month Libor plus a spread of 450 basis points.
Freddie Mac said that 75 investors participated on the STACR 2014-DN2 offering; the February deal by contrast had 65 investors participate. The latest deal is scheduled to settle on or around April 9.Morgan Stanley and Nomura Securities are the co-lead managers on the transaction. Bank of America Merrill Lynch, Citigroup and RBS served as co-managers.