Freddie Offering $1.3B in K Certificates

Freddie Mac Monday said it is offering about $1.3 billion in K certificates in its 14^th multifamily securities deal of this type for the year.

The K-032 certificates, which constitute Freddie’s 51^st K deal, are backed by 90 recently originated multifamily mortgages. They are expected to price this week and settle on or about Sept. 26.

JPMorgan and Merrill Lynch are co-lead managers and joint managers for the offering, which will be offered by a syndicate of dealers. The co-managers are Deutsche Bank, Goldman Sachs and Jefferies.

The offering includes two senior principal and interest classes, one senior interest-only class and one junior IO class.

Fitch and Kroll are rating the three senior classes and have assigned on a preliminary basis their top preliminary ratings to them subject to ongoing monitoring.

According to the Kroll report, all the loans have 10-year terms except one 15-year loan. Ninety-seven percent of the pool is comprised of amortizing balloon loans. The loans were originated by 16 different originators from September 2010 through June 2013.

The collateral is located in 27 states, with the three largest concentrations in California (17%), Georgia (8%) and Florida (8%). The majority of the properties are garden-style apartment projects (71 properties, 81.6%). The properties range in size from 20 to 1,309 units.