Freddie Mac Announces First K Certificates Offering Backed Only by 5-Year Multifamily Mortgages

McLean, Va.—Freddie Mac today announced its first offering of Structured Pass-Through Certificates (“K Certificates”) backed exclusively by multifamily mortgages with a 5-year term.  The company expects to offer approximately $1.1 billion in K Certificates (“K-501 Certificates”), which are expected to price the week of March 19, 2012, and settle on or about April 11, 2012.  This is Freddie Mac’s fourth K Certificate offering this year.

The K-501 Certificates will be offered to the market by a syndicate of dealers led by Wells Fargo Securities LLC and Morgan Stanley & Co. LLC as co-lead managers and joint bookrunners. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Guggenheim Securities LLC will serve as co-managers. The K-501 Certificates are backed by 50 recently originated multifamily mortgages and are guaranteed by Freddie Mac.

The K-501 Certificates include two senior principal and interest classes, two senior interest only classes and a junior interest only class.  Rating agencies Moody’s Investors Service, Inc. and Morningstar, Inc. have been engaged to rate the four senior classes of K-501 Certificates, which are each expected to receive a rating of “Aaa(sf)” and “AAA,” respectively, subject to on-going monitoring.

Freddie Mac is a leading issuer of agency-guaranteed structured multifamily securities. They feature a wide range of investor options with stable cash flows and a structured credit enhancement. K Deals include guaranteed senior and interest only classes.

The preliminary offering circular supplement relating to the K-501 Certificates can be found at http://www.freddiemac.com/mbs/data/k501oc.pdf.  A Freddie Mac multifamily investor presentation on the K Certificate deal structure and multifamily loan portfolio performance data are available at FreddieMac.com.  Freddie Mac also has an online tool for investors and analysts, Multifamily Securities Investor Access.This is a central database that houses all post-securitization data from Investor Reporting Packages to help investors and analysts monitor K-Deal performance.