More than 65 investors participated in Freddie Mac's latest Structured Agency Credit Risk deal, an oversubscribed offering of credit protection on a $31 billion reference pool of mortgages.

Over 20 of the investors were new, Kevin Palmer, vice president of single-family strategic credit costing and structuring for Freddie Mac, said in a press release.

Pricing for the STACR Debt Notes, Series 2014 DN1 M-1 class was one-month Libor plus a spread of 100 basis points. 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.

The M-1 class received investment grade ratings of A1 from Moody’s and A by Kroll, subject to ongoing monitoring. The M-2 class received investment grade ratings of Baa1 from Moody’s and BBB by Kroll, subject to ongoing monitoring. The M-3 class was unrated.

The three classes have an exchangeable feature giving investors the option to either combine pro-rata portions of the cash flows from the M-1, M-2 and M-3 classes or strip off a portion of the interest from any class to create bonds with different margins.

Freddie Mac plans regular issuance of STACRs this year, Donna Corley, senior vice president of single family pricing and costing for Freddie Mac said in the release.

The government-sponsored enterprise began offering the deals last year with the goal of sharing more risk with the private sector at the direction of its regulator. It has offered three STACRS in total so far.

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