Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The company expects to issue approximately $535 million in K Certificates (K-SG1 Certificates), which are expected to settle on or about October 16, 2020.
“We are encouraged by the warm market reception of our first sustainability deal,” said Robert Koontz, the head of Capital Markets for Freddie Mac Multifamily. “This transaction provides a foundation for Freddie Mac’s innovative approach to continue supporting sustainable communities through the financing of affordable housing.”
K-SG Deals – Sustainability Bonds. According to the company’s Sustainability Bonds Framework pdf, the proceeds of Freddie Mac’s Sustainability Bonds will be used to finance multifamily properties that (a) finance affordable housing to low-to moderate-income families, (b) may have features, or be located in areas, that further economic opportunity for residents and (c) may include certain environmental impact features.
- Co-Lead Managers and Joint Bookrunners: Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
- Co-Managers: CastleOak Securities, L.P., Citigroup Global Markets Inc., Mizuho Securities USA LLC and Oppenheimer & Co. Inc.
The K-SG1 Certificates are backed by corresponding classes issued by the FREMF 2019-KSG1 Mortgage Trust (K-SG1 Trust) and guaranteed by Freddie Mac. The K-SG1 Trust will also issue certificates consisting of the Class X2-A, Class X2-B, Class C and Class R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-SG1 Certificates.
Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (SEC) on February 13, 2020; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2019, excluding any information “furnished” to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information “furnished” to the SEC on Form 8-K.
Freddie Mac’s press releases sometimes contain forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company’s control. Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and estimates, and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. These assumptions, judgments, estimates and factors are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2019, and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s website at www.sec.gov.
The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release. The multifamily investors section of the company’s Web site at https://mf.freddiemac.com/investors/ will also be updated, from time to time, with any information on material developments or other events that may be important to investors, and we encourage investors to access this website on a regular basis for such updated information.
The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac undertakes no obligation, and disclaims any duty, to update any of the information in those documents.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
MEDIA CONTACT: Mike Morosi
INVESTOR CONTACTS: Robert Koontz