Freddie K-Certificate Offer Boosts Multifamily Securitization Market
Mortgage securitization agency Freddie Mac (FRE) is offering another round of structured pass-through certificates, or K Certificates, that consist of multifamily mortgage-backed securities (MBS). It marks the third series of K Certificates backed by multifamily mortgages originated through Freddie's Capital Markets Execution (CME) product, the agency said, and the first of half a dozen planned for the new year as successful past offerings continue to spark life within Freddie's multifamily pipeline for securitization. If the new offering is successful, it will add liquidity to the multifamily market. Freddie expects to offer $1.1bn of these certificates - backed by 70 recently-originated multifamily mortgages that Freddie guarantees - which should price around January 27 and close by February 3, according to a statement. Goldman Sachs (GS) and JP Morgan Securities will act as co-lead mangers on the transaction. "While this is our first deal in 2010, given our pipeline we expect to come to market every other month throughout 2010 with new deals, and thereby continue to provide greater liquidity to the multifamily housing market," said David Brickman, vice president of multifamily and commercial mortgage-backed securities (CMBS) capital markets at Freddie, in a statement. Freddie's first offering of these certificates settled in June 2009. Then, in October, the most recent offering oversubscribed at $101 per certificate, indicating growing investor support at a time of few multifamily deals. Mail to Diana Golobay. The author holds no relevant investment positions.