Freddie Launches New REMIC Program

Freddie Mac has created a new program, Reference REMIC securities, to offer new structured mortgage-backed securities.Freddie Mac said the new real estate mortgage investment conduit securities will borrow some features from the company's Reference Notes program, including a quarterly issuance calendar and offerings through a syndicate dealers. In addition, the REMICs feature a "guaranteed maturity class" to reduce extension risk for investors and intraday electronic pricing that is expected to reduce the disparity between bid and offer prices. Mark Hanson, vice president for mortgage funding at Freddie Mac, said that the REMIC market might have lost some investors in recent years because of the increasing complexity of deals. Freddie Mac hopes the characteristics of this REMIC program will bring those investors back into the market and attract new investors. "When you put all those together, we think what you have is a much more attractive collection of features," he said. The first deal, likely to be announced on April 4, will total at least $2 billion, Freddie Mac said. Subsequent quarterly offerings will be at least $1 billion in size.