Fannie Mae has announced that all Connecticut Avenue Securities (CAS) deals issued as direct debt have received designations for the 2019 filing year from the National Association of Insurance Commissioners (NAIC). Four M-2 bonds were upgraded to an NAIC 1 designation and two M-2 bonds were upgraded to an NAIC 2 designation.
The CAS bonds which received upgraded NAIC Designations in the 2019 filing year are listed here. CAS REMIC transactions are issued out of a bankruptcy remote trust, rather than as direct debt of Fannie Mae.
Fannie Mae issued the first REMIC structure for Connecticut Avenue Securities in November 2018. Renee Schultz, SVP of Capital Markets at Fannie Mae, stated that it "was an important transaction for a number of different reasons."
"One, for us, it helped align the accounting treatment, the recognition of the loss and the benefit. Also, it opened up the investor base. "
Fannie Mae announced in November 2019 that it has priced a $998 million Connecticut Avenue Securities note offering. The offering, CAS Series 2019-R07, is designed to share credit risk on its single-family conventional guaranty book of business.”
“We are pleased to successfully bring our seventh CAS REMIC transaction to market this year,” said Laurel Davis, VP of Credit Risk Transfer, Fannie Mae. “Subject to market conditions, we plan to return to market in late November with a new series of CAS notes referencing loans originated under Fannie Mae’s Refi Plus and HARP initiative, as part of ongoing capital management efforts. This will be our final transaction of the year.”
The reference pool for CAS Series 2019-R07 consists of approximately 102,000 single-family mortgage loans with an outstanding UPB of approximately $26.6 billion. The majority of these loans were acquired from April through June 2019, and are fixed-rate, generally 30-year term, fully amortizing mortgages.
Potential buyers can register for ongoing announcements or training, and find more information on Fannie Mae's sales of Community Impact Pools of non-performing loans and on the Federal Housing Finance Agency's guidelines for these sales, on the company’s Whole Loans Sales' page.