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Freddie Mac expands credit risk transfer program

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Freddie Mac expands credit risk transfer program

Freddie Mac is expanding its credit risk transfer program with a new series of Structured Agency Credit Risk notes backed by relief refinance loans, including those that meet Home Affordable Refinance Program eligibility criteria.

Freddie Mac announced the pricing for the $200 million STACR Series 2017-HRP1, with coupons ranging from one-month LIBOR plus a spread of 125 basis points to one-month LIBOR plus a spread of 460 basis points.

The notes have a reference pool of single-family mortgages with unpaid principal balance of about $15 billion, consisting of a subset of fixed-rate, single-family mortgages with original terms of 241 to 360 months funded by the government-sponsored enterprise between April 1, 2009, and Dec. 31, 2011. Freddie Mac holds in its entirety the senior loss risk A-H bond and the M-1H bond and a portion of the credit risk in the M-2, B-1 and B-2 tranches.

Credit Suisse and Bank of America Merrill Lynch are co-lead managers and joint book runners.