has priced a new offering of Structured Pass-Through Certificates (K Certificates), totaling $667 million, backed by seven-year fixed-rate multifamily mortgages. The certificates were put in place on behalf of 13 properties across the western United States. J.P. Morgan Securities and Morgan Stanley & Co. served as co-lead managers and joint bookrunners, while Cantor Fitzgerald & Co., Citigroup Global Markets Inc., Credit Suisse Securities and Multi-Bank Securities Inc served as co-managers.
The K-BX1 Certificates will include two senior principal and interest classes and one interest-only class. The Certificates are backed by corresponding classes issued by the FREMF 2018-KBX1 Mortgage Trust and guaranteed by Freddie Mac. The K-BX1 Trust will also issue certificates consisting of the Class B, C and R Certificates, which will be subordinate to the classes backing the K-BX1 Certificates. The K-BX1 Trust Class B, C and R Certificates will not be guaranteed by Freddie Mac.
K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K-Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
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