McLEAN, VA-Freddie Mac is bringing to marketits ninth K Certificates for the year—a $1.1 billion offering thatis backed by fixed-rate multifamily mortgages with seven-yearterms. The agency is pricing the K Certificates beginning this weekand expects to settle on or about July 26, 2012. Freddie Mac wasunable to return a call to GlobeSt.com in time for publication.
The K-710 Certificates are backed by 55 recently originatedmultifamily mortgages guaranteed by Freddie Mac. They include twosenior principal and interest classes, a senior interest-only classand a junior interest-only class. In general, the typical structurefor Freddie Mac’s K-deals includes K guaranteed senior andinterest-only classes, with the related underlying private-labeltrust consisting of unguaranteed mezzanine, subordinate andinterest only bonds.
The K-710 Certificates are expected to receive AAA ratings byFitch Ratings and Morningstar CreditRatings, which have been engaged to rate the three seniorclasses. Introduced in 2009, the program has become a routinefixture in the securitization space, fulfilling Freddie’s originalgoal of adding more liquidity to the multifamily sector.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
