Freddie Mac Announces First Floating Rate K Certificates Offering Backed By Multifamily Mortgages

MCLEAN, Va., Sept. 27, 2012 /PRNewswire/ -- Freddie Mac (OTC: FMCC) today announced its first offering of Structured Pass-Through Certificates ("K Certificates") backed exclusively by LIBOR-based, floating rate multifamily mortgages with five- and seven-year terms. The company expects to offer approximately $1.1 billion in K Certificates ("K-F01 Certificates"), which are expected to price the week of October 1, 2012, and settle on or about October 25, 2012. This is Freddie Mac's thirteenth K Certificate offering this year.

"This deal is the next step toward our goal of offering the broadest array of financing options to our borrowers and the investor community," said Mitch Resnick, vice president of Multifamily Capital Markets for Freddie Mac. "Earlier this month we announced our first fully-wrapped K-series transaction and today our first floating rate security is being marketed.  We've settled 31 deals totaling more than $36 billion in collateral since the program's inception in 2009." 

The K-F01 Certificates will be offered to the market by a syndicate of dealers led by J.P. Morgan Securities LLC and Barclays Capital Inc. as co-lead managers and joint bookrunners. Guggenheim Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC and Wells Fargo Securities, LLC will serve as co-managers. The K-F01 Certificates are backed by 80 recently-originated multifamily mortgages and are guaranteed by Freddie Mac.

The K-F01 Certificates include one senior principal and interest class, and one interest only class. Rating agencies Moody's Investors Service, Inc. and Kroll Bond Rating Agency, Inc. have been engaged to rate the K-F01 Certificates.  The principal and interest class is expected to receive ratings of "Aaa(sf)" and "AAA(sf)", and the interest only class is expected to receive ratings of "Ba3(sf)" and "AAA(sf)" in each case from those respective agencies. The ratings will be subject to on-going monitoring.

Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities.

K Certificates feature a wide range of investor options with stable cash flows and a structured credit enhancement. K-deals include guaranteed senior principal and interest, and interest only classes.

The preliminary offering circular supplement relating to the K-F01 Certificates can be found at http://www.freddiemac.com/mbs/data/kf01oc.pdf.  A Freddie Mac multifamily investor presentation on the K Certificate deal structure and multifamily loan portfolio performance data is available at FreddieMac.com.  Freddie Mac also has an online tool for investors and analysts, Multifamily Securities Investor Access. This is a central database that houses all post-securitization data from Investor Reporting Packages to help investors and analysts monitor K-Deal performance.

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, 2011, filed with the Securities and Exchange Commission ("SEC") on March 9, 2012; 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, 2011, 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. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2011, http://www.freddiemac.com/investors/infostat and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com.  Twitter: @FreddieMac

SOURCE Freddie Mac

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