MCLEAN, Va., March 10, 2020 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) has priced a new offering of Structured Pass-Through Certificates (K Certificates), which includes a class of floating rate bonds indexed to the Secured Overnight Financing Rate (SOFR). The approximately $865 million in K Certificates (K-F76 Certificates) are expected to settle on or about March 19, 2020. The K-F76 Certificates are backed by floating-rate multifamily mortgages with 10-year terms, which are currently LIBOR-based.

K-F76 includes one class (Class AL) of senior bonds indexed to LIBOR and another class (Class AS) of senior bonds indexed to SOFR. Freddie Mac will provide a basis risk guarantee on Class AS that covers any floating interest rate basis risk if the value of SOFR exceeds the value of LIBOR. The structure is similar to K-F73, which priced in December 2019.

Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.