By Taylor Fox
New York, Oct. 19 – Freddie Mac priced a new $372 million offering of credit risk transfer securities backed by tax-exempt loans (TELs) made by state or local housing agencies and secured by affordable rental housing, according to a company announcement.
This is Freddie Mac’s seventh ML certificate offering and its first sustainability bond.
Freddie Mac has divided the securities into California-only and non-California classes, allowing California’s state tax exemption to pass through to investors in the California classes.
Freddie Mac expects to guarantee about $372 million of fixed-rate ML certificates that are supported by pools of fixed-rate TELs.
The new ML certificates include the following:
• $247,709,000 of 1.677% class A-US senior principal and interest certificates with a weighted average life of 12.76 years;
• $125,058,000 of 1.689% class A-CA senior principal and interest certificates with a weighted average life of 13.37 years;
• $247,709,000 of 2.021% class X-US interest-only certificates with a weighted average life of 12.36 years; and
• $125,058,000 of 2.132% class X-CA interest-only certificates with a weighted average life of 13.01 years.
The certificates will be issued by Frete 2020-ML-07 Trust. The trust will also issue class B-US and B-CA certificates, but those will not be guaranteed by Freddie Mac, according to the press release.
The certificates are expected to settle on or about Oct. 23.
Proceeds from the securities will be used to finance multifamily properties that finance affordable housing to low-to-moderate-income families; may have features, or are located in areas, that further economic opportunity for residents; and may include some environmental impact features.
Wells Fargo Securities, LLC and Jefferies LLC are the bookrunners and lead managers.
AmeriVet Securities, Inc.; KeyBanc Capital Markets Inc.; Piper Sandler & Co. and Stifel, Nicolaus & Co., Inc. are co-managers.
The government-backed mortgage lender is based in McLean, Va.
| Issuer: | Frete 2020-ML-07 Trust
|
| Guarantor: | Freddie Mac
|
| Amount: | $372 million
|
| Description: | Credit risk transfer securities (ML-07 certificates)
|
| Bookrunners: | Wells Fargo Securities, LLC and Jefferies LLC
|
| Co-managers: | AmeriVet Securities, Inc.; KeyBanc Capital Markets Inc.; Piper Sandler & Co. and Stifel, Nicolaus & Co., Inc.
|
| Trade date: | Oct. 19
|
|
|
| Class A-US
|
| Amount: | $247,709,000
|
| Average maturity: | 12.76 years
|
| Coupon: | 1.677%
|
| Yield: | 1.413%
|
| Spread: | 53 bps
|
| Dollar price: | $102.9958
|
|
|
| Class A-CA
|
| Amount: | $125,058,000
|
| Average maturity: | 13.37 years
|
| Coupon: | 1.689%
|
| Yield: | 1.436%
|
| Spread: | 53 bps
|
| Dollar price: | $102.9983
|
|
|
| Class X-US
|
| Amount: | $247,709,000
|
| Average maturity: | 12.36 years
|
| Coupon: | 2.021%
|
| Yield: | 4.369%
|
| Spread: | 350 bps
|
| Dollar price: | $19.1328
|
|
|
| Class X-CA
|
| Amount: | $125,058,000
|
| Average maturity: | 13.01 years
|
| Coupon: | 2.132%
|
| Yield: | 5%
|
| Spread: | 410 bps
|
| Dollar price: | $20.1444
|
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