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Freddie Mac Funds $548 Million TEBS Transaction – Our Second Largest

Location: 51 properties cross-regional
Loan/Deal Type: Tax-Exempt Bond Securitization (TEBS)
Number of Units: 8,800
Loan Amount: $548 million

We recently funded our second largest Tax-Exempt Bond Securitization (TEBS), a $548 million transaction supporting more than 8,800 affordable housing units. The deal was a collaboration between Municipal Mortgage Holdings, Inc. (a subsidiary of Citigroup, Inc.), Citi Community Capital, and Municipal Capital Markets, and represents Citi's first TEBS transaction with Freddie Mac.

"The fact that we could close a $548 million transaction with Freddie Mac three days after the appointment of a Conservator is a testament to Freddie Mac's and the Conservator's commitment to remain active in the multifamily space despite these challenging times."

Hartley Hall
director of Citi Community Capital

The securitized pool consists of predominantly fixed-rate, tax-exempt and taxable multifamily housing revenue bonds and is comprised of 79 tax-exempt bonds and nine taxable "tail" bonds. The transaction is secured by 51 multifamily properties, all Low-Income Housing Tax Credit (LIHTC) properties.

"This transaction demonstrates how Freddie Mac continues to provide much-needed liquidity to the multifamily mortgage market," said Mike May, Freddie Mac Multifamily senior vice president. "When it comes to running our business, we are not missing a beat."

Hartley Hall, director of Citi Community Capital added, "The fact that we could close a $548 million transaction with Freddie Mac three days after the appointment of a conservator is a testament to Freddie Mac's and the conservator's commitment to remain active in the multifamily space despite these challenging times. It also demonstrates the depth of Citi's relationship with Freddie Mac."

The Freddie Mac Tax-Exempt Bond Securitization (TEBS) execution brings capital market efficiencies to the affordable housing market, offering owners of privately placed multifamily housing revenue bonds the potential to exchange those bonds for a AAA Freddie Mac security plus a small unrated residual security, freeing up capital for the owners of those bonds to use again for new affordable production.

© 2012 Freddie Mac

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