OVERVIEW Product Summary

Freddie Mac introduced STACR Trust in Q2 2018 as an enhancement to STACR, the first GSE credit risk transfer program that was developed in 2013. STACR Trust allows STACR transactions to be issued under a STACR Trust going forward. The capital structure will largely remain the same as STACR debt.

STACR Trust will continue to reduce taxpayer’s credit exposure to Freddie Mac by issuing trust notes – unsecured and non-guaranteed bonds – whose principal payments are determined by the delinquency and principal payment performance on a STACR Reference Pool.

Characteristics

  • One of the industry’s largest and most diversified reference pools
  • Senior and junior mezzanine notes are not guaranteed by Freddie Mac and are sold to investors
  • The notes are paid monthly principal, similar to a senior/subordinate private label residential mortgage backed securities structure
  • Losses based on credit events in the reference pool are allocated to the notes in reverse order of seniority and reduce the balance of such notes
  • Freddie Mac holds the senior risk, which is unfunded and not issued
  • STACR notes have a 10-year final maturity for fixed severity transactions and 12.5-year final for actual loss transactions
  • Freddie Mac may retain all or a portion of the first-loss piece
  • Interested payments are uncapped floaters

STACR Trust Legal Documents

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credit_securities@freddiemac.com(866) 903-2767