MCLEAN, VA. >> Freddie Mac on Monday further expanded its leading Single-Family Credit Risk Transfer initiatives by enhancing disclosures and announcing its intent to sell its next offering of Structured Agency Credit Risk desk notes pending market conditions.
The debt notes, STACR 2016-HQA1, are being made available in the company's second STACR offering this year.
Through the award-winning and innovative STACR program, Freddie Mac transfers a portion of its credit risk on certain single-family loans to private capital market investors.
The enhanced disclosures for all Single-Family Credit Risk Transfer initiatives will include:
• Updated credit scores for outstanding loans in all transactions provided quarterly.
• Updated mark-to-market LTVs that leverage the estimated property value from Freddie Mac's proprietary Home Value Explorer(R) Automated Valuation Model tool provided quarterly.
• Loan-level mortgage insurance details, identifying lender-paid versus borrower-paid mortgage insurance.
• Additional details for loan modifications, such as modification program, type and step-rate information.
"By providing more ongoing information, investors can better analyze our seasoned Credit Risk Transfer securities," said Kevin Palmer, senior vice president of Freddie Mac Credit Risk Transfer. "Improved analytics reduces the uncertainty for internal valuation and secondary trading activities."
With the $475 million STACR 2016-HQA1 offering of loans with LTVs ranging from 80 to 95 percent, Freddie Mac holds the senior loss risk in the capital structure and a portion of the risk in the Class M-1, M-2 and M-3 tranches, and the first loss Class B tranche.
Barclays and Wells Fargo Securities will serve as co-lead managers and joint bookrunners. Cantor Fitzgerald, Deutsche Bank Securities, J.P. Morgan and Nomura are co-managers. Ramirez and Co., Inc. is the selling group member.
STACR 2016-HQA1 has a reference pool of single-family mortgages with an unpaid principal balance of more than $17.5 billion. The reference pool consists of a subset of 30-year fixed-rate single-family mortgages acquired by Freddie Mac between April 1, 2015 and June 30, 2015.
Freddie Mac has a STACR issuance calendar to help investors plan their allocations. The calendar is available on the Credit Risk Offerings page of the company's web site at www.FreddieMac.com.