Freddie Mac Announces First Fully-Wrapped K-Deal, K-P01, Backed By Multifamily Mortgages

MCLEAN, Va., Sept. 13, 2012 /PRNewswire/ -- Freddie Mac (OTC: FMCC) today announced its first K-P Series offering of multifamily Structured Pass-Through Certificates (K Certificates).  The company expects to offer approximately $450 million in K Certificates (K-P01 Certificates), which are expected to price the week of September 10, 2012, and settle on or about October 3, 2012.  The K-P01 Certificates are guaranteed by Freddie Mac and are backed by 28 seasoned multifamily mortgages.

In the K-P Series, Freddie Mac purchases and guarantees all of the securities issued by the related underlying trust.  In contrast, previous K Certificate transactions (non K-P Series) contained some unguaranteed subordinate securities that were placed with third-party investors. Freddie Mac is also serving as special servicer for the related underlying trust, the first time Freddie Mac has served in this capacity in its K Series program.  Further, the K-P01 Certificates are backed by seasoned loans from the Freddie Mac's retained portfolio rather than newly-originated loans. 

The K-P01 Certificates will be offered to the market by Credit Suisse Securities (USA) LLC as lead manager and bookrunner. CastleOak Securities, L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC will serve as co-managers. The K-P01 Certificates are unrated and include two senior principal and interest classes and one senior interest only class. 

"Since we began the CME program in 2009, we've expanded our range of offerings to include 5-, 7-, and 10-year, single-asset, and single-borrower securitizations.  This deal represents a departure from previous K-Series transactions because the collateral is comprised of performing, seasoned loans and we're wrapping the entire structure," said Mitch Resnick, Vice President of Freddie Mac Multifamily. "K-P01 will help Freddie Mac continue its commitment to provide liquidity through the secondary mortgage market."

Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities. They feature a wide range of investor options with stable cash flows and a structured credit enhancement.

The preliminary offering circular supplement relating to the K-P01 Certificates can be found at http://www.freddiemac.com/mbs/data/kp01oc.pdf.  A Freddie Mac multifamily investor presentation on the K Certificate deal structure and multifamily loan portfolio performance data are 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. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. www.FreddieMac.com.  Twitter: @FreddieMac

SOURCE Freddie Mac

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