Syndicated Callables

In response to investor demand, Freddie Mac has expanded its callable offerings to include syndicated callable notes. These securities will be offered no more than twice a month; minimum size will be $1 billion and target size will be $2 billion or larger.

Description

Freddie Mac's syndicated callable notes are large, liquid medium-term notes. These securities share with Reference Notes^® securities the advantages of large offering sizes, international dealer sponsorship and secondary market liquidity. They are designed to achieve the following goals:

• Meet investor demand for sizable, well-distributed securities that clear the market and continue to trade well long after settlement.
  
• Increase liquidity, enhance price transparency, narrow bid/ask spreads and facilitate favorable trading long after settlement.
  

Distribution and Pricing

Freddie Mac will form a syndicate of dealers to distribute the securities under a book building process. Generally, transactions will be announced three days prior to pricing. Freddie Mac will not issue the same structure through other distribution mechanisms during the following timeframe: a minimum of two days prior to the announcement through three days after pricing. Participating dealers will make active secondary markets monitored by Freddie Mac.

Guidelines for Issuance

• Frequency – no more than twice a month.
• Issue Size – minimum $1 billion, targeting $2 billion or larger.
• Syndicate – 2 to 3 joint leads and selling group.
• Issuance Lockout – no issuance of like structure two days prior to announcement of a deal through three days after pricing.
• Marketing Period – generally three days from announcement to pricing, subject to market conditions and investor response.
• Pricing Method – securities are priced at a spread to Freddie Mac's References Notes^® curve in accordance with the Bond Market Association's guidelines on trading callable Agency debt, or at a spread to U.S. Treasuries. Coupons will be in 1/8 increments.