The government-sponsored enterprise plans to offer approximately $1.3 billion in structured pass-through certificates. The deal, K-025, is expected to price Thursday and settle Feb. 13.
A spokeswoman said the transaction is a standard 10-year deal. According to the offering circular, the 10 largest loans in it range from a mortgage that has a balance of more than $91 million on a high rise in New York to a mortgage that has a balance of more than $33 million on townhomes in Middle River, Md. Other large loans among the top 10 are secured by properties in San Jose, Calif.; Pembroke Pines, Fla.; Houston; Bethesda, Md.; Kansas City, Mo.; Tallahassee, Fla.; San Antonio; and Aurora, Colo.
In total, 83 recently originated multifamily mortgages back the certificates, which are guaranteed by Freddie Mac. The certificates include two senior principal and interest classes, one senior interest-only class and a junior interest-only class. Kroll and Moody’s expected to assign the three senior classes their highest structured finance ratings, subject to ongoing monitoring.
A syndicate of dealers led by Merrill Lynch and Morgan Stanley will offer the certificates to the market as co-lead managers and joint bookrunners. Barclays, Credit Suisse, Guggenheim Securities and JPMorgan will serve as co-managers.
Freddie generated $28 billion in combined loan purchase and bond guarantee volume in 2012, up 42% from the previous year’s $20.3 billion and also above the previous record for annual volume set in 2008 at $24 billion. The GSE noted that the figure includes affordable housing products which finance apartments that received some form of government subsidy.
K-deal issuance during the year exceeded expectations in 2012. According to a statement by David Brickman, SVP of Freddie Mac multifamily, on Wednesday it was up 55% during the year.