Opus Completes $509M Freddie Risk-Transfer “Q-Deal”

Merchant banking firm Opus Bank completed a $509 million securitization of its multifamily loans through a Freddie Mac-sponsored “Q-deal” risk-transfer securitization, the company announced Tuesday.

Opus chairman Stephen Gordon termed the deal a “novel” transaction that improved liquidity while reducing its commercial real estate concentration and lowering its levels of risk-weighted assets, risk-based capital and loan-to-deposit ratios.

“We believe the execution of this securitization strategy enhanced our flexibility and optionality,” said Gordon, who is one of the top five community bankers to watch in 2017 by American Banker, a sister publication of Asset Securitization Report.

Freddie Mac’s “Q”-deal programs combines both guaranteed senior bonds and non-guaranteed mezzanine and interest-only bonds, similar to the structures of Freddie’s more well-known “K”-deal programs. Unlike “K” deals, the “Q” certificates programs include securitizations of multifamily mortgages not originated under Freddie Mac underwriting guidelines, or were not purchased by Freddie prior to securitization.

The Federal Housing Finance Agency has targeted a credit risk-transfer level of at least 80% of multifamily loans purchased or guaranteed by Freddie and Fannie Mae into the hands of private investors in 2017.

Opus (Nasdaq: OPB), a $7.5 billion-asset institution headquartered in Irvine, Calif., provides financing for affordable multifamily housing in major metropolitan areas on the West coast.