Fannie, Freddie Issue Multifamily Investment Offerings
Fannie prices $1 billion Multifamily DUS REMIC, Freddie prices $685 million Multifamily When-Issued K-Deal.
Fannie Mae priced a $1 billion Multifamily DUS® REMIC under its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS™) program on Jan. 19, 2022. FNA 2022-M1 marks the first Fannie Mae GeMS issuance of 2022.
“We are pleased to kick off 2022 with another milestone in the market’s transition away from LIBOR, with our first multifamily REMIC quoted using the spread to the Secured Overnight Financing Rate (SOFR) swap curve,” said Dan Dresser, senior vice president, Multifamily Capital Markets & Pricing. “Market participants had begun socializing the use of the SOFR swap curve (“p-spread”) when quoting fixed-rate ACMBS trades in late 2021 and the transition of new-issue ACMBS to this benchmark is one more step in that journey.”
Dresser added that “the M1, with its discount, 10-year fixed-rate collateral, found strong demand in the market with the A2 tranche pricing at a 52-basis-point spread to the SOFR swap curve, equating to a 26-basis-point spread to the LIBOR swap curve.”
All classes of FNA 2022-M1 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal.
For additional information, refer to the Fannie Mae GeMS REMIC Term Sheet (FNA 2022-M1) available on the Fannie Mae GeMS Archive page.
Freddie Mac, meanwhile, recently priced a new offering of Multifamily WI K-Deal Certificates (WI Certificates), which are initially backed by cash assets that will be used to purchase the A-2 and A-M classes of a to-be-issued reference K-Deal.
Once the reference K-Deal classes are issued and purchased by the WI trust, the WI Certificates will be indirectly backed by a pool of fixed-rate multifamily mortgages with predominantly 10-year terms. The company expects to issue approximately $685 million in WI Certificates (Series WI-K140), which are expected to settle on or about Jan. 31, 2022.
WI Certificates are funded investments, which settle shortly after the offering period. The WI Certificates are tradeable shortly after pricing and are public securities backed by the Freddie Mac guarantee. The WI Certificates’ fixed-rate coupons are expected to be identical to that of the reference K-Deal classes.
Freddie Mac has published an investor presentation providing additional details on the WI K-Deal program. You can read that here.
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.