Freddie Mac's third "K" multifamily mortgage deal backed by seven-year mortgages is in the works this week.
“We are finding that there is good investor appetite for the seven-year product,” Victor Pa, vice president, portfolio management and securitization, Freddie Mac, told this publication in an interview Tuesday.
The company has $1 billion in K certificates pricing this week that are being offered to the market by a syndicate of dealers led by Wells Fargo Securities LLC and Credit Suisse Securities USA LLC as co-lead managers and joint bookrunners.
The K-703 certificates are backed by 71 recently originated multifamily mortgages guaranteed by Freddie Mac.
K deals have Freddie Mac guaranteed senior and interest only classes and related private-label underlying trusts. The trusts include mezzanine, subordinate and IO bonds that are not guaranteed. The GSE also has prepayment restrictions on the underlying loans in these deals aimed at reducing their interest rate sensitivity.
