Fannie Mae Prices $1.161 Billion Connecticut Avenue Securities Risk Sharing Deal

WASHINGTON, Nov. 14, 2017 /PRNewswire/ -- Fannie Mae (OTC Bulletin Board: FNMA) priced its seventh credit risk sharing transaction of 2017 under its Connecticut Avenue Securities^™ (CAS) program. CAS Series 2017-C07, a $1.2 billion note offering, is scheduled to settle on November 21, 2017. CAS is Fannie Mae's benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business.

"Our final deal of 2017 was met with very strong investor demand, including new investor interest," said Laurel Davis, Fannie Mae's Vice President of Credit Risk Transfer. "Investors continue to provide us with positive feedback on the transparency we provide as part of our CAS program, including our response to recent hurricane events and the information we make available in Data Dynamics®, our analytical tool for investors. We expect to continue regular benchmark issuance of CAS notes in 2018, subject as always to market conditions."

The reference pool for CAS Series 2017-C07 consists of more than 144,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $33.9 billion. The reference pool will include two groups, comprised of collateral with loan-to-value ratios of 60.01 to 80.00 percent and 80.01 to 97.00 percent. The mortgage loans that have  loan-to-value ratios of 60.01 to 80.00 percent were acquired from February 2017 through April 2017 and mortgage loans that have  loan-to-value ratios of 80.01 to 97.00 percent were acquired from April 2017 through June 2017. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages, and were underwritten using rigorous credit standards and enhanced risk controls.

Fannie Mae will retain a portion of the 1M-1, 1M-2, 1B-1, 2M-1, 2M-2, and 2B-1 tranches in order to align its interests with investors throughout the life of the deal. Fannie Mae will retain the full 1B-2, 2B-2, 1A-H, and 2A-H tranches.

Merrill Lynch, Pierce, Fenner & Smith Inc. ("BofA Merrill Lynch") is the lead structuring manager and joint bookrunner and Nomura Securities International ("Nomura") is the co-lead manager and joint bookrunner. Co-managers are Barclays Capital Inc. ("Barclays"), Goldman Sachs & Co. LLC ("Goldman Sachs"), J.P. Morgan Securities LLC ("J.P. Morgan"), and Morgan Stanley & Co. LLC ("Morgan Stanley"). Selling group members are Drexel Hamilton, LLC and Samuel A. Ramirez & Company, Inc.

With the completion of this transaction, Fannie Mae will have brought 23 CAS deals to market since the program began, issued $28.5 billion in notes, and transferred a portion of the credit risk to private investors on single-family mortgage loans with an original unpaid principal balance of approximately $942 billion. Since 2013, Fannie Mae has transferred a portion of the credit risk on approximately $1.2 trillion in single-family mortgages through all of its risk transfer programs.

Fannie Mae's deliberate issuer strategy works to build the CAS program in a sustainable way to promote liquidity and to build a broad and diverse investor base. To promote transparency and to help investors evaluate our program, Fannie Mae provides ongoing robust disclosure data to help credit investors evaluate the program, as well as access to news, resources, and analytics through its credit risk sharing webpages. This includes Fannie Mae's innovative Data Dynamics tool, which enables market participants to analyze CAS deals that are currently outstanding.

In addition to the flagship CAS program, Fannie Mae continues to reduce risk to taxpayers through its Credit Insurance Risk Transfer^™ (CIRT^™) reinsurance program and other forms of risk transfer.

About Connecticut Avenue Securities
CAS notes are bonds issued by Fannie Mae. The amount of periodic principal and ultimate principal paid by Fannie Mae is determined by the performance of a large and diverse reference pool. For more information on individual CAS transactions and Fannie Mae's approach to credit risk transfer, visit our credit risk sharing website.

Statements in this release regarding the company's future CAS transactions are forward-looking. Actual results may be materially different as a result of market conditions or other factors listed in "Risk Factors" or "Forward-Looking Statements" in the company's annual report on Form 10-K for the year ended December 31, 2016. This release does not constitute an offer or sale of any security. Before investing in any Fannie Mae issued security, potential investors should review the disclosure for such security and consult their own investment advisors.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.

SOURCE Fannie Mae

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