Freddie Mac’s single-family business announced a CRT issuance in Q3 2022 of approximately $4.7 billion for its Credit Risk Transfer (CRT) program, protecting approximately $136 billion in outstanding principal balance ( UPB) of single-family mortgage loans.
Single-family CRT program issuance totaled more than $19.7 billion, protecting UPB’s $495 billion in single-family mortgages for the first three quarters of the year. The issuances included flagship transactions STACR (Structured Agency Credit Risk) and ACIS (Agency Credit Insurance Structure), as well as other risk-sharing transactions. Through its flagship offerings alone, Freddie Mac issued approximately $19.2 billion across 10 STACR and 10 ACIS transactions in the first three quarters of 2022.
“Freddie Mac’s Single-Family CRT program delivered record performance for the first three quarters of the year. Eleven new investors and (re)insurers added in the third quarter brought the number of unique participants in our program this year to more than 175,” said Mike Reynolds of Freddie Mac, Vice President of Single-Family CRT. “Notably, STACR exceeded its total 2021 issuance in the first nine months of this year alone. Given the significant volatility and widening spreads in the capital market, we will not be offering STACR issuance. additional for the remainder of 2022.”
Freddie Mac will continue to execute (re)insurance transactions through ACIS in the fourth quarter.
In addition, during the first three quarters, the Company executed three tender offers for certain STACR Notes. Over $4.9 billion in current principal balance of Notes has been deposited and accepted. The Notes offered had significantly deleveraged and therefore no longer provided Freddie Mac with capital relief.
Since the first CRT transaction in 2013, Freddie Mac’s Single-Family CRT program has cumulatively transferred approximately $104.5 billion of credit risk on more than $3.2 trillion in mortgages through STACR and ACIS. As of September 30, 2022, approximately 61% of the single-family mortgage loan portfolio was covered by credit enhancement.