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Freddie Mac announced a new offering of Structured Pass-Through Certificates (K Certificates). The offering is backed primarily by fixed-rate multifamily mortgages with a 7-year term. "The company expects to offer approximately $1.2 billion in K Certificates (K-715 Certificates), which are expected to price the week of April 28, 2014, and settle on or about May 13, 2014," the company said.
"Multifamily K Certificates are regularly-issued, structured pass-through securities backed by recently-originated multifamily mortgage loans. K-deals feature a range of investor options with stable cash flows and a structured credit enhancement," the company noted.
This current offering is Freddie Mac's fifth K Certificate offering this year.
Benefits of multifamily K Certificates include strong credit standards backed up by Freddie Mac's strong underwriting standards, diversification through pooled risk, and a guarantee of timely payment of interest and payment of principal.
The certificates are backed by 90 recently originated multifamily mortgages. Kroll Bond Rating Agency and Moody's Investors Service are rating the three senior classes of K-715 certificates, which are expected to garner a rating of "AAA(sf)" and "Aaa(sf)," respectively.
A syndicate of dealers will offer the certificates, led by Barclays Capital and Credit Suisse Securities. Guggenheim Securities, LLC, Jefferies LLC, Stern Brothers & Co. and Wells Fargo Securities, LLC will serve as co-managers.
