Freddie Mac has obtained new insurance policies under its Agency Credit Insurance Structure program. Through ACIS, Freddie Mac transfers a portion of the credit risk associated with its Structured Agency Credit Risk debt note reference pools to insurance and reinsurance companies around the globe.
This new transaction provides credit loss protection up to a combined maximum limit of approximately $336 million of losses on single-family loans and transfers much of the remaining credit risk associated with another transaction, STACR 2016-HQA1, completed this month.
Both transactions relate to a $17.5 billion pool of 30-year fixed-rate single-family mortgages acquired by Freddie Mac between April 1 and June 30, 2015. The STACR notes are general obligations of Freddie Mac, but their performance is linked to credit risk on the loans; investors can lose interest and principal if losses on the loans reach certain levels. ACIS is a more traditional form of reinsurance.
"We are very pleased about the continued partnership Freddie Mac has developed with the reinsurance market. This market has proved to be a durable partner for credit risk transfer," said Kevin Palmer, senior vice president of single-family credit risk transfer for Freddie Mac.
Freddie Mac has placed approximately $4.3 billion in insurance coverage through 16 ACIS transactions since the program's inception in 2013.