Freddie Mac reports that it has priced its second Seasoned Credit Risk Transfer Trust (SCRT) offering of this year – a rated securitization of approximately $1.6 billion of both guaranteed senior and un-guaranteed subordinate securities.
The SCRT securitization program is the government-sponsored enterprise’s overall effort offload less liquid assets in its portfolio and reduce taxpayer risk.
In this most recent series, the company is expected to issue approximately $1.5 billion in guaranteed senior certificates and approximately $127 million in un-guaranteed mezzanine and subordinate certificates.
The issuance is expected to settle on June 13.
The collateral backing the certificates are 8,628 fixed- and step-rate modified seasoned re-performing loans (RPLs), the company says in a release. These loans were modified to assist borrowers who were at risk of foreclosure to help them keep their homes and will have been performing for at least 12 months as of the issuance of the certificates.
The loans are serviced by Specialized Loan Servicing. The servicing of the loans will be in accordance with requirements that prioritize borrower retention options in the event of a default and promote neighborhood stability.
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc. are co-lead managers and joint bookrunners. Credit Suisse Securities (USA), J.P. Morgan Securities, and Samuel A. Ramirez & Company Inc. are the co-managers.
To date, Freddie Mac has sold $7 billion of non-performing loans and transacted $38 billion of RPLs consisting of 1) $27 billion via fully guaranteed PCs, 2) $10 billion via SCRT securitizations, and 3) $1 billion via Seasoned Loan Structured Transaction offerings.