Freddie Mac (OTCQB: FMCC) today announced pricing of the second Seasoned Credit Risk Transfer Trust (SCRT) offering of 2020—a securitization of approximately $1.6 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 and sheds credit and market risk via economically reasonable transactions.
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2020-2 includes approximately $1.4 billion in guaranteed senior certificates and approximately $204 million in unguaranteed mezzanine and subordinate certificates. The mezzanine certificates will be rated. The transaction is expected to settle on July 14, 2020. The underlying collateral consists of 9,702 fixed- and step-rate, seasoned RPLs, most of which were modified to assist borrowers who were at risk of foreclosure to help them keep their homes. As of the cutoff date, 6.84% of the mortgage loans have been flagged as on a forbearance plan with the servicer. Consistent with program criteria, as of the cutoff date, all the mortgage loans, including those on a forbearance plan, have been performing and not delinquent in the last 6 months using the MBA method of calculation.
The loans are serviced by Select Portfolio Servicing, Inc. and will be serviced in accordance with requirements pdf that prioritize borrower retention options in the event of default and promote neighborhood stability.
Advisors to this transaction are Citigroup Global Markets Inc., and J.P. Morgan Securities LLC as co-lead managers and joint bookrunners, and BMO Capital Markets Corp., BofA Securities, Inc., Nomura Securities International, Inc., Wells Fargo Securities, LLC, and Seelaus & Co., LLC (a woman-owned business) as the co-managers.
To date, Freddie Mac has sold over $8 billion of Non-Performing Loans (NPLs) and securitized more than $62 billion of RPLs consisting of $29 billion of fully guaranteed PCs, $27 billion of SCRT senior/sub securitizations, and $7 billion of Seasoned Loans Structured Transaction (SLST) offerings. Additional information about the company’s seasoned loan offerings can be found at: http://www.freddiemac.com/seasonedloanofferings/
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 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: Fred Solomon