Freddie Mac offering $1 billion of multifamily bonds

Freddie Mac plans to offer $1 billion of pass-through certificates this week backed by 90 recently originated multifamily mortgages. JPMorgan (JPM) and Wells Fargo (WFC) will lead the underwriting syndicate for the deal, which is set to price this week and settle around Aug. 10. This is the eighth issue of multifamily K certificates by the government-sponsored enterprise this year. The mortgages in this week’s K-014 series have various terms. In February, the GSE sold its first ‘700-series’ K Certificates, which include multifamily mortgages with an original maturity of seven years. David Brickman, vice president of multifamily commercial mortgage-backed securities capital markets for Freddie Mac, said growth in multifamily mortgage purchases enabled the mortgage giant to “tailor securities that segregate our collateral by maturity and provide tighter principal windows to better meet the specific needs of investors.” Freddie Mac said the certificates provide investors with stable cash flows, structured credit enhancement and the government guarantee. When the Treasury Department released its recommendations on reforming the GSEs, an increase of 25 basis point in the cost of the government guarantee for Federal Housing Administration borrowers was included. Write to Jason Philyaw.