Freddie Mac recently priced its second Seasoned Credit Risk Transfer Trust (SCRT) offering of 2019 – a rated securitization of approximately $2.4 billion including both guaranteed senior and unguaranteed subordinate securities backed by a pool of seasoned re-performing loans (RPLs).
The offering includes approximately $2.2 billion in guaranteed senior certificates and approximately $247 million in unguaranteed mezzanine and subordinate certificates.
The underlying collateral consists of 12,406 fixed- and step-rate, seasoned RPLs which were modified to assist borrowers who were at risk of foreclosure to help them keep their homes.
As of the cutoff date, all of the mortgage loans, which are serviced by Select Portfolio Servicing Inc., have been performing for at least 12 months.
The buyer(s) of these loans must have them serviced in accordance with requirements that prioritize borrower retention options in the event of default and promote neighborhood stability.
Advisors to this transaction, which is expected to settle on May 15, include Citigroup Global Markets Inc. and Nomura Securities International Inc. which are serving as co-lead managers and joint bookrunners, as well as Bank of America Merrill Lynch, BMO Capital Markets Corp., Credit Suisse Securities, Wells Fargo Securities and The Williams Capital Group, LP (a minority-owned business) are serving as the co-managers.
To date, Freddie Mac has sold $8 billion of non-performing loans and securitized more than $50 billion of RPLs consisting of $29 billion via fully guaranteed PCs, $18 billion via SCRT transactions, and $3 billion via Seasoned Loan Structured Transaction (SLST) transactions.