Freddie Mac’s STACR Program Receives Prestigious RMBS Award

Financial news and data service GlobalCapital has named Freddie Mac's Structured Agency Credit Risk (STACR) offerings the RMBS Deal of the Year, according to an announcement from Freddie Mac.

The RMBS Deal of the Year award is one of the premier capital markets awards recognizing issuers, investors, banks, and law firms that push securitization and help rapidly changing markets move forward, according to Freddie Mac. This was the second major award Freddie Mac's STACR offerings have received in the last two years; last year, GlobalCapital's parent company, Euromoney, honored STACR with the Global Structured Deal of the Year Award.

"We are proud of our role in leading market innovations that return value to the nation and move housing forward," said Kevin Palmer, VP of Credit Risk Transfer at Freddie Mac. "We created a new asset class with STACR that has brought a significant amount of private capital into the mortgage market and demonstrated the viability of multiple types of risk transfer transactions involving single-family mortgages."

Freddie Mac began the STACR program in the second half of 2013 as part of the Enterprise’s goal of reducing risk to taxpayers by increasing private capital’s role in the mortgage market. According to Freddie Mac, the GSE was the first agency to market credit risk transfer transactions with STACR and Agency Credit Insurance Structure and now features an investor base that includes more than 160 unique investors. The demand for STACR transactions has been growing steadily since the first one in 2013, and the recent STACR offerings were the first of their kind to sell first loss and actual loss risk, according to Freddie Mac.

The STACR offering in late May priced at $425.6 million was Freddie Mac's fourth this year and 13th overall. Freddie Mac has laid off a substantial portion of credit risk for more than $280 billion in unpaid balances on single-family mortgages through STACR transactions, according to the GSE. The enterprise has issued $10 billion in STACR bonds to date, representing reference pools of $292.6 billion through 13 issuances.