McLEAN, VA-Like Fannie Mae did earlier this month, Freddie Mac is bringing to market a structured offering that is backed exclusively by floating rate loans. The $1.1 billion offering, part of its K-Certificates product line, is expected to price the week of October 5, 2012. It is the GSE’s thirteenth K-Certificate this year.
These Libor-based loans have all been originated within the last few months, Mitch Resnick, vice president of Multifamily Capital Markets for Freddie Mac, tells GlobeSt.com. Freddie Mac has always had a floating rate program; however demand for these loans have not been a great as they have been for fixed-rate loans, for obvious reasons. Still, demand does exist--as Fannie Mae illustrates as well--and Freddie Mac has now accumulated enough loans to put out a floating-rate securitization, Resnick said. “We are anticipating more offerings as well, depending on how well received this one is.”
Earlier this month Freddie Mac also brought to market yet another new flavor of its K-Certificates: a so-called $450 million K-P certificate, which was comprised of seasoned loans the GSE had on its portfolio. These deals, in a new twist, were fully wrapped.
As for its newest offering, the K-F01 certificates include one senior principal and interest class, and one interest only class. They will be offered to the market by a syndicate of dealers led by J.P. Morgan Securities and Barclays Capital as co-lead managers and joint bookrunners. Guggenheim Securities, Merrill Lynch, Pierce, Fenner & Smith, UBS Securities and Wells Fargo Securities will serve as co-managers. The K-F01 Certificates are backed by 80 recently-originated multifamily mortgages.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
