Freddie Mac announces first credit risk-sharing deal of 2016
Right on schedule
After completing eight Structured Agency Credit Risk Series credit risk-sharing deals in 2015, Freddie Mac announced Tuesday that it plans to sell its first credit risk-sharing deal of 2016.
When Freddie Mac completed its eight STACR deal of 2015, it said that it planned eight more for 2016, with the first coming in January, so this new deal is right on time.
Freddie Mac said Tuesday that its latest STACR deal features debt notes of $996 million, subject to market conditions. Through the STACR program, Freddie Mac transfers a portion of its credit risk on certain single-family loans to private capital markets investors.
According to Freddie Mac, STACR Series 2016-DNA1 has a reference pool of recently acquired single-family mortgages with an unpaid principal balance of more than $35.7 billion.
As part of the deal, Freddie Mac holds the senior loss risk in the capital structure, and a portion of the risk in the Class M-1, M-2, M-3, and B Bonds.
Bank of America Merrill Lynch and J.P. Morgan will serve as co-lead managers and joint bookrunners. Barclays, Citigroup, Credit Suisse and Wells Fargo are co-managers, and Williams Capital is a selling group member.
The offering is scheduled to settle on or around Jan. 21, 2016.