Freddie Mac Guarantees REMIC Maturity.(Real Estate Mortgage Investment Conduit)

McLean, VA -- Freddie Mac is launching a new REMIC program that features innovations such as a guaranteed maturity to minimize extension risk in a rising rate environment and electronic trading capability to reduce the disparity between bid and offer prices.

The first Reference REMIC, expected on April 4, will total at least $2 billion, Freddie Mac said last week. The Reference REMIC series will continue with a quarterly schedule of offerings, with each tranche totaling at least $1 billion.

Reference REMICs will be backed by U.S. home mortgages through Freddie Mac's Gold PCs, and the PCs serving as collateral will be disclosed prior to pricing.

Freddie Mac said the new REMIC series includes features that have never before appeared in the REMIC market, including electronic, intraday pricing of securities. Reference REMIC securities will be the first REMICs available on TradeWeb, with electronic trading available in May, Freddie Mac said.

In addition, the REMIC series, which borrows features from Freddie Mac's Reference Notes program, will be issued on a regular, quarterly calendar. Freddie Mac said it would issue at least one, and no more than two, Reference REMIC securities each quarter.

The securities will be issued through a multitiered syndicate of dealers rather than a single dealer.

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