Freddie Mac Upsizes Another Credit Risk Transfer Offering

STACR REMIC 2020-DNA4 Distributes Risk Through Nearly $1.1 Billion Issuance

MCLEAN, Va., Aug. 25, 2020 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) announced today that it has priced its STACR 2020-DNA4 offering. Investor demand led Freddie Mac to increase the planned size of the bond issuance—the third upsized STACR offering since March—to nearly $1.1 billion.

STACR (Structured Agency Credit Risk) and ACIS (Agency Credit Insurance Structure) make up Freddie Mac's flagship credit risk transfer (CRT) program. ACIS 2020-DNA4 is scheduled to close August 25 along with its STACR counterpart.

“Freddie Mac’s CRT offerings continue to attract investors confident in our ability to do the hard work of mitigating risk day-in and day-out,” said Freddie Mac’s Christian Valencia, Vice President, Single-Family CRT. “We remain committed to our role as the largest ongoing programmatic issuer of this class of securities—a class that we’re proud to have pioneered.”

STACR REMIC 2020-DNA4
STACR REMIC 2020-DNA4 is Freddie Mac’s fourth securities transaction of the year covering single-family loans with low loan-to-value (LTV) ratios between 61% and 80%. The loans were securitized between January 1, 2020 and March 31, 2020 and originated on or after January 1, 2015.

Pricing for STACR REMIC 2020-DNA4:

• M-1 class: one-month LIBOR plus a spread of 150 basis points.
  
  
• M-2 class: one-month LIBOR plus a spread of 375 basis points.
  
  
• B-1 class: one-month LIBOR plus a spread of 600 basis points.
  
  
• B-2 class: one-month LIBOR plus a spread of 1000 basis points.

Freddie Mac holds in its entirety the senior loss risk A-H bond and the first loss B-3H bond in the capital structure. Freddie Mac also retains a portion of the risk in the class M-1, M-2, B-1, and B-2 tranches. Nomura and Amherst Pierpont are co-lead managers and joint bookrunners.

Freddie Mac has led the market in introducing new credit risk sharing opportunities. Since 2013, the company has transferred a portion of credit risk on approximately $1.7 trillion in unpaid principal balance (UPB) on single-family mortgages. It has also grown its investor base to more than 250 unique participants, including investors, insurers and reinsurers.

This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (SEC) on February 13, 2020; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2019, excluding any information "furnished" to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information "furnished" to the SEC on Form 8-K.