[1]Freddie Mac has obtained another actual loss insurance policy under its Agency Credit Insurance Structure (ACIS [2]) program, which is tied to an actual loss deal that is part of the Structured Agency Credit Risk (STACR [3]) program, according to an announcement [4] from Freddie Mac on Monday.
The latest ACIS transaction transfers much of the remaining credit risk associated with the first actual loss STACR offering from April 2015 (STACR Series 2015 DNA1), and it transfers combined maximum limit of up to about $132.5 million in losses on single-family mortgage loans acquired by Freddie Mac in Q4 2012.
Freddie Mac obtains insurance policies through ACIS that transfer to insurance and reinsurance companies worldwide.
"We continue to expand the panel of participating reinsurers as the ACIS program matures," said Kevin Palmer, VP of Freddie Mac's Single-Family strategic credit costing and structuring. "We have now acquired more than $1 billion in additional insurance coverage this year with six ACIS transactions, and almost $2 billion since the program's inception in 2013. This transaction includes new and past participants as we strive for consistency in how and where we transfer credit risk."
The first two ACIS transactions were completed by Freddie Mac in July, providing coverage based on both first loss and actual losses realized on a pool of residential mortgages, according to Freddie Mac.
"This transaction includes new and past participants as we strive for consistency in how and where we transfer credit risk."
Freddie Mac has laid off a substantial portion of credit risk on more than $333 billion in unpaid balance in single-family mortgages through 15 STACR offerings (including first loss and actual loss risk transactions) and 10 ACIS transactions since the middle of 2013. Freddie Mac's investor base has grown to include more than 160 unique investors since the Enterprise began marketing credit risk transactions with STACR and ACIS.
Last week, Freddie Mac priced its first STACR transaction [5] selling its first actual loss offering of loans with LTV ratios ranging from 80 to 95 percent.