Freddie Mac said it expects to offer around $1.1 billion in structured passthrough certificates (K Certificates), multifamily MBS.
The transaction is expected to price on or about Nov. 16, and settle on or about Nov. 23.
Additionally, the agency said that over 80% of its multifamily mortgage purchases are eligible for securitization and it's likely that it will have more frequent issuances beginning next year.
The K-009 Certificates will be offered to the market by several dealers led by Bank of America Merrill Lynch and Barclays Capital as co-lead managers and joint bookrunners for the transaction.
Meanwhile, Citigroup Global Markets, Goldman, Sachs, Credit Suisse, Deutsche Bank Securities, Jefferies & Co,, JPMorgan Securities and Wells Fargo Securities are co-managers on the deal.
The K-009 Certificates, which follow a sequential-pay structure, are backed by 70 recently originated multifamily mortgages and are guaranteed by Freddie Mac. The loans were originated using Freddie Mac's capital markets execution (CME) program. A loan that represents 6.9% of the pool was shadow rated by Fitch Ratings ‘A-sf’.
These deals offer the GSE an efficient vehicle to securitize multifamily loans, the agency said. They provide investors structured guaranteed securities with stable cash flows and with both structured credit enhancement and the Freddie Mac guaranty.
According to Fitch, loans originated under the CME program adhere to the originator best practices identified by the rating agency.
In a presale report on the deal, it said that Freddie Mac multifamily loans were outperforming Fitch-rated CMBS multifamily loans as of 2Q10. This is based on an average delinquency rate of 0.28% versus 13.8%, respectively.