WASHINGTON, DC—Fannie Mae priced its latest credit risk sharing transaction under its Connecticut Avenue Securities (CAS) series. The $1.449 billion note offering is scheduled to settle on May 27. This deal includes reference loans with original loan-to-value ratios of up to 97%.

Fannie Mae introduced the series in 2013 in response to the Federal Housing Finance Agency's mandate to the GSEs to transfer more credit risk to the private sector.

The GSE is planning additional innovations to the structure this year, according to Laurel Davis, vice president for credit risk transfer at Fannie Mae. "We look forward to preparing the market for our transition to an actual loss structure late this year," she said.

Last month Freddie Mac debuted its first actual loss STACR offering in a bid to continue to transfer risk off of its balance sheet, as well as respond to market demand.

The key difference to these transactions is that instead of allocating losses to the debt notes based upon a fixed severity approach, losses will be allocated based on the actual losses realized on the related reference obligations.

Fannie Mae's latest CAS follows a separate but related development from the Federal Housing Finance Authority last week. The FHFA issued an update on its roadmap for a single GSE security. Last year, FHFA issued a Request for Input on the proposed structure and ultimately received 23 letters in response. The update has incorporated some of this feedback.