Freddie Mac Multifamily K-Deals Surpass Half-Trillion Mark

BY GlobeNewswire | AGENCY | 05/12/22 12:00 PM EDT

MCLEAN, Va., May 12, 2022 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) K-Deal? securitization issuance volume today surpassed the $500 billion mark with the settlement of K-F135. The K-Series, which began in earnest in 2009, revolutionized how Freddie Mac Multifamily conducts business, moving the agency from being a portfolio lender to one that transfers credit risk to third-party investors.

?The K-Deal has been key to Freddie Mac Multifamily?s growth for more than a decade,? said Robert Koontz, senior vice president of Freddie Mac Multifamily Capital Markets. ?It?s a simple and straightforward execution with a track record of virtually no credit losses. With a half-trillion in volume to date, K-Bonds are also the most liquid and tradeable multifamily securities around and have become a benchmark security for the industry.?

Since 2009, Freddie Mac has settled 485 separate K-Deals totaling $500.5 billion in issuance volume. The growth in Freddie Mac?s K-Deal volume has accelerated in recent years along with record production volumes. In 2021, the firm priced 67 fixed- and floating-rate deals with a total issuance of $63.5 billion. K-Deals have enjoyed a continually growing and dedicated investor base. Nearly 1,000 separate investors have participated since the creation of the program.

K-Deals feature a range of investor options with stable cash flows and a structured credit enhancement. The tranches include Freddie Mac guaranteed senior principal and interest and interest-only classes, with underlying private label trusts offering unguaranteed subordinate bonds.

At present, 99.97% of loans securitized through K-Deals are current as measured by outstanding principal balance. Freddie Mac has not to date realized any credit losses on K-Deal guarantees.

More information about the K-Deal structure and performance are available here:

Freddie Mac Multifamily is the nation's multifamily housing finance leader. Historically, more than 90% of the eligible rental units we fund are affordable to families with low-to-moderate incomes earning up to 120% of area median income.?? Freddie Mac securitizes about 90% of the multifamily loans it purchases, thus transferring the majority of the expected credit risk from taxpayers to private investors.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at, Twitter @FreddieMac and Freddie Mac's blog

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Source: Freddie Mac

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.