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Freddie Mac prices $646M offering of structured pass-through certificates

Freddie Mac on Oct. 15 priced a $646 million offering of structured pass-through certificates, which are multifamily mortgage-backed securities.

The K-L03 certificates, which are expected to settle on or around Oct. 22, are backed by two groups of loans. One group consists of one fixed-rate mortgage backed by one property and the other group consists of one mortgage with floating- and fixed-rate components backed by eight properties. The transaction collateral is part of Freddie Mac's K-L series of certificates, which are backed by large loans or pools of related mortgage loans on multifamily properties.

The K-L03 certificates will not be rated and will include four senior principal-and-interest classes and two interest-only classes.

The certificates are backed by corresponding classes issued by the FREMF 2018-KL03 Mortgage Trust and guaranteed by Freddie Mac. The trust will also issue class B-LNZ, B-W, C-W and R certificates, which Freddie Mac will not guarantee. These additional certificates will not back any class of K-L03 certificates.

Merrill Lynch Pierce Fenner & Smith Inc. and Jefferies LLC are co-lead managers and joint book runners for the offering. Goldman Sachs and Co., Nomura Securities International Inc., Stern Brothers & Co. and Wells Fargo Securities LLC are co-managers for the offering.