Freddie Mac announced on Monday a new $1.37 billion offering of K certificates—multifamily mortgage-backed securities—that are expected to price on Thursday and settle near July 24.
The new offering marks Freddie Mac’s 11th K certificate offering this year. Since the program began in 2009, Freddie has securitized more than $57 billion in multifamily loans.
The K-029 certificates are guaranteed by Freddie and are backed by 87 recently-originated multifamily mortgages. They will be offered by a syndicate of dealers led by Wells Fargo and Morgan Stanley. Barclays, Credit Suisse, Jefferies and Merrill Lynch, Pierce, Fenner & Smith will serve as co-managers.
“We are achieving the K program’s main goal of attracting private capital to the market by placing the subordinate classes with third party investors,” Mitchell Resnick, the vice president of Freddie Mac’s multifamily loan pricing and securitization division, said. “This structure has allowed Freddie Mac to dramatically reduce its risk and use its guarantee to only insure the transactions’ senior portion.”
The certificates include two senior principal and interest classes, as well as one senior interest only class and a junior interest only class. The three senior classes are expected to receive “AAA” ratings from Fitch Ratings and DBRS.