Fannie Mae has priced Connecticut Avenue Securities (CAS) Series 2022-R03, an approximately $1.2 billion note offering that represents Fannie Mae’s third CAS REMIC transaction of the year.
CAS is Fannie Mae’s benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business.
“Our latest deal was met with solid demand from a deep base of investors,” says Devang Doshi, senior vice president of single-family capital markets at Fannie Mae. “Subject to market conditions, we look forward to returning to market in early April with CAS 2022-R04, another low-LTV transaction.”
The reference pool for CAS Series 2022-R03 consists of approximately 150,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $44 billion. The reference pool includes collateral with loan-to-value ratios of 60.01% to 80%, which were acquired between March 2021 and April 2021. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.
Fannie Mae will retain a portion of the 1M-1, 1M-2, 1B-1, and 1B-2 tranches and will retain the full 1B-3H first-loss tranche.
BofA Securities Inc. is the lead structuring manager and joint bookrunner. Wells Fargo Securities LLC is the co-lead manager and joint bookrunner. Co-managers are Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Nomura Securities International Inc. and StoneX Financial Inc. Selling group members are Service-Disabled Veteran-owned Drexel Hamilton LLC and Hispanic-owned Ramirez & Co.
With the completion of this transaction, Fannie Mae will have brought 47 CAS deals to market, issued over $54 billion in notes, and transferred a portion of the credit risk to private investors on just under $1.8 trillion in single-family mortgage loans, measured at the time of the transaction.