Freddie Mac Announces First K Certificates Offering Backed Only by 5-Year Multifamily Mortgages

MCLEAN, Va., March 19, 2012 /PRNewswire/ -- Freddie Mac (OTC: FMCC) today announced its first offering of Structured Pass-Through Certificates ("K Certificates") backed exclusively by multifamily mortgages with a 5-year term.  The company expects to offer approximately $1.1 billion in K Certificates ("K-501 Certificates"), which are expected to price the week of March 19, 2012, and settle on or about April 11, 2012.  This is Freddie Mac's fourth K Certificate offering this year.

"In the first quarter of this year, we have brought four K Deals to a vibrant Agency CMBS market," said Mitch Resnick, co-head of Multifamily Capital Markets for Freddie Mac. "We are constantly looking for ways to enhance the scope of our lending and securities platforms in order to appeal to a variety of borrower and investor needs.  This transaction, which is our first backed exclusively by 5-year mortgages, continues this commitment."

The K-501 Certificates will be offered to the market by a syndicate of dealers led by Wells Fargo Securities, LLC and Morgan Stanley & Co. LLC as co-lead managers and joint bookrunners. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Guggenheim Securities, LLC will serve as co-managers. The K-501 Certificates are backed by 50 recently-originated multifamily mortgages and are guaranteed by Freddie Mac.

The K-501 Certificates include two senior principal and interest classes, two senior interest only classes and a junior interest only class.  Rating agencies Moody's Investors Service, Inc. and Morningstar, Inc. have been engaged to rate the four senior classes of K-501 Certificates, which are each expected to receive a rating of "Aaa(sf)" and "AAA", respectively, subject to on-going monitoring.  

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. K Deals include guaranteed senior and interest only classes.

The preliminary offering circular supplement relating to the K-501 Certificates can be found at http://www.freddiemac.com/mbs/data/k501oc.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

SOURCE Freddie Mac

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