Freddie Mac has announced the pricing of the first Seasoned Credit Risk Transfer Trust (SCRT) offering of 2020—a securitization of approximately $1.8 billion including both guaranteed senior and unguaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs). The SCRT securitization program is a fundamental part of Freddie Mac's seasoned loan offerings which reduce less liquid assets in its mortgage-related investments portfolio sheds credit and market risk via economically reasonable transactions.
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2020-1 includes approximately $1.7 billion in guaranteed senior certificates and approximately $177 million in unguaranteed mezzanine and subordinate certificates. The mezzanine certificates will be rated. The transaction is expected to settle on March 10, 2020. The underlying collateral consists of 10,992 fixed- and step-rate, seasoned RPLs which were modified to assist borrowers who were at risk of foreclosure to help them keep their homes. As of the cutoff date, all of the mortgage loans have been performing for at least 6 months. The loans are serviced by Specialized Loan Servicing LLC and will be serviced in accordance with requirements that prioritize borrower retention options in the event of default and promote neighborhood stability.
Advisors to this transaction are BofA Securities, Inc., and Nomura Securities International, Inc. as co-lead managers and joint bookrunners, and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, and R. Seelaus & Co. (a women-owned business) as the co-managers. To date, Freddie Mac has sold over $8 billion of Non-Performing Loans (NPLs) and securitized more than $60 billion of RPLs consisting of $29 billion of fully guaranteed PCs, $25 billion of SCRT senior/sub securitizations, and $7 billion of Seasoned Loans Structured Transaction (SLST) offerings.