Freddie Mac Upsizes Another Credit Risk Transfer Offering

McLEAN, Va.Freddie Mac (OTCQB: FMCC) announced today that it has priced its STACR 2020-DNA4 offering. Investor demand led Freddie Mac to increase the planned size of the bond issuance—the third upsized STACR offering since March—to nearly $1.1 billion.

STACR® (Structured Agency Credit Risk) and ACIS® (Agency Credit Insurance Structure) make up Freddie Mac's flagship credit risk transfer (CRT) program. ACIS 2020-DNA4 is scheduled to close August 25 along with its STACR counterpart.

“Freddie Mac’s CRT offerings continue to attract investors confident in our ability to do the hard work of mitigating risk day-in and day-out,” said Freddie Mac’s Christian Valencia, Vice President, Single-Family CRT. “We remain committed to our role as the largest ongoing programmatic issuer of this class of securities—a class that we’re proud to have pioneered.”

STACR REMIC 2020-DNA4

STACR REMIC 2020-DNA4 is Freddie Mac’s fourth securities transaction of the year covering single-family loans with low loan-to-value (LTV) ratios between 61% and 80%. The loans were securitized between January 1, 2020 and March 31, 2020 and originated on or after January 1, 2015.

Pricing for STACR REMIC 2020-DNA4:

  • M-1 class: one-month LIBOR plus a spread of 150 basis points.
  • M-2 class: one-month LIBOR plus a spread of 375 basis points.
  • B-1 class: one-month LIBOR plus a spread of 600 basis points.
  • B-2 class: one-month LIBOR plus a spread of 1000 basis points.

Freddie Mac holds in its entirety the senior loss risk A-H bond and the first loss B-3H bond in the capital structure. Freddie Mac also retains a portion of the risk in the class M-1, M-2, B-1, and B-2 tranches. Nomura and Amherst Pierpont are co-lead managers and joint bookrunners.

Freddie Mac has led the market in introducing new credit risk sharing opportunities. Since 2013, the company has transferred a portion of credit risk on approximately $1.7 trillion in unpaid principal balance (UPB) on single-family mortgages. It has also grown its investor base to more than 250 unique participants, including investors, insurers and reinsurers.

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.

About Freddie Mac Single-Family Credit Risk Transfer

Freddie Mac’s Single-Family CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies. We founded the GSE SingleFamily CRT market when we issued our first Structured Agency Credit Risk (STACR®) notes in July 2013. In November 2013, we introduced our Agency Credit Insurance Structure (ACIS®) program. Today, CRT serves as the primary source of private capital investment in residential mortgage credit. For specific STACR and ACIS transaction data, please visit Clarity, our CRT data intelligence portal. 

About Freddie Mac

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, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMacClarity and Freddie Mac’s blog FreddieMac.com/blog.