Freddie Mac has priced its second offering of multifamily structured credit risk debt notes nearly eight months after introducing the securities in May.
The notes, which are expected to settle on or around Dec. 29, are designed to reduce taxpayers' exposure to mortgage default risk by passing on a portion of the credit risk to private capital markets credit investors.
The $43.1 million SCR Notes Series 2016-MDN2, Class B, are linked to the credit and principal payment risk of a reference pool of multifamily mortgage loans backing state and local housing finance agency tax-exempt bonds for which Freddie Mac provides credit enhancement. The notes are not backed by the reference pool itself.
Wells Fargo is serving as the sole structuring agent, lead manager and sole book runner.