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Freddie Mac prices $1B multifamily mortgage-backed certificates

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Freddie Mac prices $1B multifamily mortgage-backed certificates

Freddie Mac has priced an offering of aggregation risk transfer certificates backed by fixed-rate multifamily mortgages.

The KT02 certificates are expected to settle on or about Nov. 29, and are designed to transfer a portion of the credit risk associated with eligible multifamily mortgage loans to certain investors prior to sale into K-series securitizations.

On the settlement date, Freddie Mac will sell to the FMPRE 2017-KT02 multifamily aggregation risk transfer trust approximately $1 billion in eligible mortgage loans.

The KT Trust will issue class A, B, C, D and E certificates. Freddie Mac will guarantee timely payment of interest, reimbursement of realized losses and ultimate repayment of principal on the class A certificates but will not guarantee the class B, C, D or E certificates. The company will purchase the class A and E certificates.

Barclays Capital Inc. and Wells Fargo Securities LLC are the lead managers and book runners, while Academy Securities Inc. is acting as co-manager for the offering.