Freddie Mac on Monday said it expects to price this week its ninth so-called K multifamily securities offering for the year.
The structured pass-through certificates in the offering, K-710, will be backed exclusively by fixed-rate mortgages with seven-year terms.
There are 55 recently originated mortgages backing the certificates, which include two senior principal and interest classes, a senior interest-only class and a junior interest-only class. Fitch Inc. and Morningstar Credit Ratings LLC are slated to rate the three senior classes. These classes are expected to receive top ratings subject to ongoing monitoring.
Freddie spokeswoman Patti Boerger said after the offering settles the government-sponsored enterprise will have issued a total of about $11.3 billion in K offerings this year. (The securities are expected to settle on or about July 26.) In 2011, Freddie completed 12 K offerings totaling $13.7 billion.
JPMorgan Securities LLC and Merrill Lynch are the co-lead managers and joint bookrunners for the syndicate offering the securities to the market. The co-managers for the offerings are Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Guggenheim Securities LLC, Jefferies & Co. Inc. and Sandler O’Neill & Partners LP.
In structured pass-through or K offerings, Freddie issues private-label mortgage-backed securities, but then purchases all the senior bonds it guarantees and securitizes these through a separate third-party trust to offer to the market. The bonds issued by the original trust that are not guaranteed are privately offered.
