Freddie Mac Multifamily K-Deal – GuruFocus.com
MCLEAN, Va., May 12, 2022 (GLOBE NEWSWIRE) — Freddie Mac’s (FMCC) K-Deal® Securitization (FMCC) Issue Volume Surpassed the $500 Billion Mark Today with the Settlement of K-F135 . The Series K, which began in earnest in 2009, revolutionized the way Freddie Mac Multifamily does business, transforming the agency from a portfolio lender to one that transfers credit risk to third-party investors.
“The K-Deal has been key to the growth of Freddie Mac Multifamily for more than a decade,” said Robert Koontz, senior vice president of Freddie Mac Multifamily Capital Markets. “It’s simple, straightforward execution with a track record of virtually no credit loss. With a volume of half a trillion to date, K-Bonds are also the most liquid and tradable multi-family securities and have become a benchmark security for the industry.
Since 2009, Freddie Mac has settled 485 separate K-Deals totaling $500.5 billion in issue volume. Freddie Mac’s K-Deal volume growth has accelerated in recent years, alongside record production volumes. In 2021, the firm priced 67 fixed and floating rate transactions with total issuance of $63.5 billion. K-Deals have benefited from a dedicated and steadily growing investor base. Nearly 1,000 distinct investors have participated since the program’s inception.
K-Deals offer a range of options for investors with stable cash flow and structured credit enhancement. Tranches include principal principal guaranteed by Freddie Mac and interest and interest-only categories, with underlying private label trusts offering subordinated unsecured bonds.
Currently, 99.97% of loans securitized through K-Deals are current, as measured by the outstanding principal balance. Freddie Mac has not realized any credit loss on K-Deal guarantees to date.
More information on the structure and performance of K-Deal can be found here: https://mf.freddiemac.com/investors/k-deals.html.
Freddie Mac Multifamily is the national leader in multifamily housing finance. Historically, more than 90% of the eligible rental units we finance are affordable for low-to-moderate income families earning up to 120% of the area’s median income. Freddie Mac securitizes about 90% of the multi-family loans it purchases, thereby transferring the majority of expected credit risk from taxpayers to private investors.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our founding by Congress in 1970, we have made housing more accessible and affordable for buyers and renters in communities nationwide. We are building a better housing finance system for buyers, renters, lenders and ratepayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog, FreddieMac.com/blog.
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