Freddie Mac has completed its third Seasoned Credit Risk Transfer (SCRT) offering – a rated securitization of approximately $2.47 billion of both guaranteed senior and unguaranteed subordinate securities.
The SCRT securitization program is a part of Freddie Mac’s seasoned loan offerings, designed to reduce less liquid assets in its mortgage-related investments portfolio and shed credit and market risk.
The offering includes approximately $2 billion in guaranteed senior certificates and approximately $421 million in unguaranteed mezzanine and subordinate certificates. The collateral backing the certificates are 9,939 fixed- and step-rate modified seasoned loans. These loans were modified to assist borrowers who were at risk of foreclosure in order to help them keep their homes, and they have all been performing for at least 12 months, as of the issuance.
The servicing of the loans – administered by Nationstar Mortgage Holdings Inc. – will be in accordance with requirements that prioritize borrower retention options in the event of a default and promote neighborhood stability. Credit Suisse Securities (USA) LLC served as lead manager and sole bookrunner of the offering. Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the co-managers, and Loop Capital Markets LLC was a selling group member.
To date, Freddie Mac has sold $7 billion in nonperforming loans (NPLs) and securitized $31 billion in re-performing loans (RPLs), of which $26 billion are in PCs and $5 billion are in structured offerings.