Freddie Mac is offering, for the first time, K-certificates backed exclusively by five-year multifamily mortgages.
The company will offer about $1.1 billion in of its K-501 series of structured pass-through certificates, which will price the week of March 19 and settle on or about April 11.
This is Freddie’s fourth K-certificate offering this year.
“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,” said Mitch Resnick, co-head of Multifamily Capital Markets for Freddie Mac. “This transaction continues this commitment.”
A syndicate of dealers led by Wells Fargo (WFC) and Morgan Stanley (MS) will offer the certificates to the market, Freddie said in a statement. The certificates are backed by 50 multifamily mortgages that were recently originated and guaranteed by Freddie Mac.
Freddie Mac launched a free database tool in January to help investors and analysts comb through loan-level data tied to K-certificates backed by multifamily mortgages.
The tool is part of Freddie’s push to increase transparency as the mortgage finance space tries to develop a sound model for bringing investors confidently back into the market.
The K-certificates include two senior principal and interest classes, two senior interest-only classes and a junior interest-only class. Moody’s (MCO) and Morningstar (MORN) were engaged to rate the four senior classes of K-501 certificates, which, Freddie said, are expected to receive a rating of Aaa(sf) and AAA, respectively, subject to ongoing monitoring.
