Fannie Mae Prices $977M Multifamily DUS REMIC

WASHINGTON, DC-Fannie Mae has priced its second Multifamily DUS REMIC under its Fannie Mae Guaranteed Multifamily Structures for the year. The deal, 2012-M2, clocked in with a number of “firsts” for the GSE: at $977 million it is the largest under the GeMS program to date. It is also the first time Wells Fargo served as partner in the transaction, Kimberly Johnson, vice president of Multifamily Capital Markets, tells GlobeSt.com. Finally, she adds, this particular transaction brought in a number of new investors.

“There were 190 underlying mortgage-backed securities, which makes for good collateral diversity,” she says. “That, in conjunction with the low leverage of 4.5%, made it a very strong deal.” Johnson says there were about a number of new investors participating in the deal—with a particular interest in the AB tranche. “Usually that tranche clear with one or two orders but we had several this time.”

Most of the new investors were regional banks or money managers, she says. Johnson attributes their interest to the offering’s yield, which is better than what Treasuries are currently offering.

She also thinks Wells Fargo debut had something to do with the new account interest. “It did a great job in distribution,” she reports.

Fannie Mae retains risk through lender origination and then securitizes the loans using a REMIC structure via its GeMS program. Last year it closed $6 billion in issuances. In 2010, that number was $4.8 billion.