WASHINGTON, May 2, 2017 /PRNewswire/ -- Fannie Mae (OTC
Bulletin Board: FNMA) priced its third credit risk sharing transaction of 2017 under its Connecticut Avenue
Securities™ (CAS) program. CAS Series 2017-C03, a $1.371 billion note offering, is
scheduled to settle on May 10, 2017. CAS is Fannie Mae's benchmark issuance program designed to
share credit risk on its single-family conventional guaranty book of business.
"Our third risk sharing transaction of the year was met with overwhelming demand by investors, who are drawn to the
consistency of our program and the quality of the underlying collateral," said Laurel Davis, vice
president of credit risk transfer, Fannie Mae. "Per our published deal calendar, we expect to return to the market with our next
CAS deal, 2017-C04, in mid-May. Our upcoming deal will reference loans that have loan-to-value ratios between 80 and 97
percent."
The reference pool for CAS Series 2017-C03 consists of more than 167,000 single-family mortgage loans with an outstanding
unpaid principal balance of approximately $41.2 billion. The loans in this reference pool have
original loan-to-value ratios between 60 and 80 percent and were acquired from July 2016 through
October 2016. The loans included in this transaction are fixed-rate, generally 30-year term, fully
amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.
Fannie Mae will retain a portion of the 1M-1, 1M-2, and 1B-1 tranches in order to align its interests with investors
throughout the life of the deal. Fannie Mae will retain the full 1B-2 tranche.
Class
|
Offered Amount
($MM)
|
Pricing Level
|
Expected
Rating
|
1M-1
|
$568.164
|
1-month Libor plus 95 bps
|
Baa3 (sf) from Moody's and BBB (sf) from DBRS.
|
1M-2
|
$607.347
|
1-month Libor plus 300 bps
|
B2 (sf) from Moody's and B (high) (sf) from DBRS.
|
1B-1
|
$195.918
|
1-month Libor plus 485 bps
|
This class will not be rated
|
Barclays Capital ("Barclays") is the lead structuring manager and joint bookrunner and Merrill Lynch, Pierce, Fenner &
Smith Inc. ("BofA Merrill") is the co-lead manager and joint bookrunner. Co-managers are Citigroup Global Markets
("Citigroup"), J.P. Morgan Securities LLC ("J.P. Morgan), Morgan Stanley & Co. LLC ("Morgan Stanley") and Nomura Securities
International, Inc. ("Nomura"). Selling group members are Academy Securities and Siebert Cisneros
Shank & Co.
Through this transaction and other credit risk sharing programs, Fannie Mae increases the role of private capital in the
mortgage market and reduces taxpayer risk. With the completion of this transaction, Fannie Mae will have brought 19 CAS deals to
market since the program began, issued $23.9 billion in notes, and transferred a portion of the
credit risk to private investors on single-family mortgage loans with an original unpaid principal balance of approximately
$802 billion. Since 2013, Fannie Mae has transferred a portion of the credit risk on approximately
$989 billion in single-family mortgages through all of its risk transfer programs.
Fannie Mae's deliberate issuer strategy works to build the CAS program in a sustainable way to promote liquidity and to build
a broad and diverse investor base. To promote transparency and to help investors evaluate our program, Fannie Mae provides
ongoing robust disclosure data to help credit investors evaluate the program, as well as access to news, resources, and analytics
through its credit risk sharing webpages. This includes Fannie Mae's innovative Data Dynamics™ tool, which
enables market participants to analyze CAS deals that are currently outstanding.
In addition to the flagship CAS program, Fannie Mae continues to reduce risk to taxpayers through its Credit Insurance Risk
Transfer™ (CIRT™) reinsurance program and other forms of risk transfer.
About Connecticut Avenue Securities™
CAS notes are bonds issued by Fannie Mae. The amount of periodic principal and ultimate principal paid by Fannie Mae is
determined by the performance of a large and diverse reference pool. For more information on individual CAS transactions and
Fannie Mae's approach to credit risk transfer, visit http://www.fanniemae.com/portal/funding-the-market/credit-risk/index.html. To view the periods in 2017 during
which Fannie Mae may issue Connecticut Avenue Securities (CAS), please view our 2017 CAS Issuance
Calendar.
Statements in this release regarding the company's future CAS transactions are forward-looking. Actual results may be
materially different as a result of market conditions or other factors listed in "Risk Factors" or "Forward-Looking Statements"
in the company's annual report on Form 10-K for the year ended December 31, 2016. This release does
not constitute an offer or sale of any security. Before investing in any Fannie Mae issued security, potential investors should
review the disclosure for such security and consult their own investment advisors .
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We
partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing
finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae .
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SOURCE Fannie Mae