Freddie Mac

WASHINGTON, DC—The GSEs are sticking to their knitting even as the drumbeat for their dismantlement grows louder and louder. On Monday Freddie Mac announced a new offering of $1.3 billion in K Certificates that are expected to price this week and settle around April 25. It is the GSE’s fourth K Certificate offering this year and its first floating rate offering for 2014. The securities are backed by 85 recently-originated floating rate multifamily mortgages based on LIBOR with five-and seven-year terms.

The K Certificates include one senior principal and interest class and one interest only class, and will not be rated. There will also be class B, C and R certificates, which will be subordinate and will not be guaranteed by Freddie Mac.

In separate news, a new organization called the Coalition for Mortgage Security has launched with the goal of winding down the GSEs. However, as its guiding principals pointedly state, it wants this process to happen with respect for the rule of law. One interpretation is that the group wants to see the GSEs unwind in a manner that doesn’t hurt the preferred shareholders, some of which are in the process of suing the US Treasury for stopping the GSEs from paying dividends a few years ago. As the coalition said on its website “The rules of the game cannot be changed in the middle of an inning.” Reuters tried to find out who is funding the organization but the group declined to comment.