Freddie Mac recently priced an $812 million offering of Structured Pass-Through Certificates (K Certificates), which are multifamily mortgage-backed securities. The K Certificates (K-PLB Certificates) are backed by Los Angeles’ historic Park La Brea, the largest apartment community on the West Coast, and are expected to settle on or about June 26, 2015. This is the company’s twelfth K Certificates offering this year.

K-PLB Pricing

Class Principal/Notional Amount (mm) Weighted Average Life (Years) Spread (bps) Coupon Yield Dollar Price
A $812.15 9.91 S + 57 2.77 2.92% $98.71
X $878.00 9.66 T + 400 0.06901 6.24% $0.86

Details:
Co-lead managers and joint bookrunners: Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
Co-managers: Guggenheim Securities, LLC and Jefferies LLC
Park La Brea: 4,245-unit rent-controlled property with below market rents in approximately 10 percent of the units and 10,000 residents

Related Links

  • The K-PLB preliminary offering circular supplement: http://www.freddiemac.com/mbs/data/kplboc.pdf.
  • Freddie Mac Multifamily Investor Presentation
  • Multifamily Securities Investor Access database of post-securitization data from Investor Reporting Packages

The K-PLB Certificates will not be rated, and include one senior principal and interest class and one interest only class. The K-PLB Certificates are backed by corresponding classes issued by the FREMF 2015-KPLB Mortgage Trust (K-PLB Trust) and are guaranteed by Freddie Mac. The K-PLB Trust will also issue certificates consisting of the Class B and R Certificates, which will be subordinate to the classes backing the K-PLB Certificates. The K-PLB Trust Class B and R Certificates will not be guaranteed by Freddie Mac.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.