Freddie Mac priced its second offering of its Structured Agency Credit Risk debt notes Tuesday, a risk-sharing mortgage bond deal that is said to feature a diverse group of private investors.
According to Freddie, pricing for the STACR debt notes, Series 2013 DN2 M-1 class was one-month LIBOR plus a spread of 145 basis points. Pricing for the M-2 class was one month LIBOR plus a spread of 425 basis points.
"The offering was oversubscribed and is scheduled to settle on Nov. 12, 2013," said an email from the government-sponsored enterprise.
The $630 million note-offering spreads some credit risk into the private market. The enterprise received investment grade ‘BBB’ ratings from both Moody’s Investors Service and Fitch Ratings.
A reference pool of more than 145,500 single-family mortgages with an outstanding principal balance of $35.3 billion backs the deal.
“STACR is part of Freddie Mac’s strategy to share credit risk with private investors while also fostering an agency credit market,” said Freddie Mac executive vice president of single-family business David Lowman.
He added, “With two successful STACR offerings under our belt, we are well on our way to having a scalable offering with regular issuances. We are pleased with the markets’ acceptance of these bonds.”
About 50 broadly diversified investors will participate in the offering. The first deal featured 50 investors, including asset managers, mutual funds, pension funds, hedge funds, insurance companies, banks and REITs.
The deal will consist of a subset of 30-year, fixed-rate single-family mortgages acquired by Freddie in the first quarter of 2013, with the enterprise holding the senior risk and the first loss risk in the reference pool.
In July, the government-sponsored enterprise sold its first risk-sharing deal for $500 million, which was a key step in the process of attracting private capital back into the mortgage finance system.