Freddie Mac is set to offload $659 million in seriously delinquent loans to a single, undisclosed buyer. The transaction marks Freddie’s first sale of seriously delinquent loans.

According to Freddie, the sale was conducted via a competitive auction that took place at the end of July and was executed indirectly through Bank of America affiliates.

Freddie selected the winning bidder “on the basis of economics” from a pool of 22 prospective buyers that took part in the auction.

When contacted, Freddie declined to identify the winner of the auction.

“The transaction was well received by the market and Freddie Mac will continue to look for opportunities to reduce exposure to less liquid assets in its investment portfolio,” Freddie said in a statement.

Bank of America Merrill Lynch and Credit Suisse Securities acted as co-advisors for the transaction.

The deal is expected to close later in the month of August.

The sale of the seriously delinquent debt joins other mechanisms that Freddie and Fannie Mae have employed to reduce the risk of loss to the American taxpayer.

Last year, Fannie and Freddie launched credit risk-sharing mortgage bond deals and to date, have issued $6.1 billion in notes in the risk-sharing deals.

But the loans in the risk-sharing deals perform much better than the loans that Freddie sold in this auction.

In a recent trend report from Fitch Ratings, Grant Bailey and Ryan O’Loughlin wrote that the performance of the deals has been “stellar” and that the ratio of delinquencies and defaults “remain immaterial.”

According to Fitch’s data, only 0.17% of underlying loans in the risk-sharing deals were currently delinquent as of July 2.