McLEAN, VA—Another month, another K-deal offering from Freddie Mac. This one, though, is different from the plain vanilla model. These K Certificates are backed exclusively by fixed-rate multifamily mortgages of 12-, 15- and 20-year terms.
It is the GSE's 13th K Certificates offering for 2015.
For this transaction, it expects to issue $455 million in K Certificates that will settle on or about July 22.
The offering is a reflection of the GSE's desire to develop products and paper that appeal to a wide variety of borrowers and investors, Mitchell Resnick, vice president of Freddie Mac Multifamily Capital Markets, says in a prepared statement.
By this point no one would accuse the GSE of being stuck in its ways: Over the years it has added five-, seven-, and 10-year term loans, floating-rate loans, single borrower loans, legacy portfolio loans, and seniors, student, military and targeted affordable housing loans.
Despite that, there is a basic, fundamental consistency to the structure that fixed-income investors want, Resnick told GlobeSt.com in an earlier interview.
Another reason for the K-Deals' popularity, Resnick also said, is that Freddie Mac is able to guarantee a senior part of the capital structure even as it sells mezzanine and subordinate bonds. The combination of these factors has led participants to come back again and again for purchases – and to make a requests for paper that meets their precise needs.
GlobeSt.com was unable to speak with Freddie Mac before publication.
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