Freddie $1 Billion Commercial Mtge Backed Security To Be Sold In June
27 May 2009 - 12:18AM
Dow Jones News
Freddie Mac (FRE) is marketing a $1 billion commercial mortgage
bond backed by multifamily loans that is due to be sold in the
second week of June.
This marks the first time that a commercial mortgage bond is
sold with the backing of a government-sponsored enterprise. It
would also be the first large commercial mortgage bond deal sold in
nearly a year.
The deal is led by Deutsche Bank Securities Inc. and is expected
to settle in June.
It is backed by 62 recently originated multifamily mortgages and
is guaranteed by Freddie Mac.
This transaction is expected to open up a new way for Freddie to
raise liquidity and support the troubled multifamily market.
Apartment and condominium complexes have been the most troubled in
the real-estate sector.
So far, both Freddie and Fannie Mae (FNM) have held multifamily
loans that they purchase on their books without securitizing them.
This move is expected to free up Freddie's capital, so that it can
invest more in multifamily loans.
"Freddie Mac is responding to difficult conditions in the
multifamily housing financing market by finding innovative ways to
link affordable rental housing to the capital markets." said Mike
May, Freddie Mac's senior vice president of multifamily
business.
By offering multifamily loan securitization through this bond,
Freddie is providing "critically needed support to the multifamily
housing market during these difficult economic times," May
said.
-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371;
anusha.shrivastava@dowjones.com