The leading mortgage provider in the world, Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA), has decided to price its Multifamily DUS REMIC for $1.04 billion. As per the reports, Fannie Mae has taken this decision under its GeMS program. Fannie Mae increased 0.97% on Friday to close the day at $2.615.
Fannie Mae’s board of directors backed this decision and called it a favorable step taken in the given market conditions. According to Josh Seiff, the first week of May revolved around rate volatility, yet FNA 2015-M8 or Multifamily DUS REMIC received good response from a range of investors. Seiff is the Vice President of the department of Trading and Capital Markets at Fannie Mae. According to him, over 30 investors took part in the deal and appreciated the relative value and strong credit quality of the offer.
Insights On FNA 2015-M8 Offering:
To attain clients’ trust, Fannie Mae has decided to guarantee FNA 2015-M8. It has ensured that the payment of interest and principal amount will be made from time to time.
Structure of Multi-Tranche Offering:
There are total seven classes of this offering with total face value of $1.035 billion. These classes are FA, SA, A1, A2, AB1, AB2, and X2. The weighted average life of them are 3.12 years, 5.11 years, 5.49 years, 9.59 years, 5.49 years, 9.59 years and 8.55 years respectively. The coupon of these classes are 0.356%, 5,113%, 2.344%, 2.900%, 2.097%, 2.829% and 0.285% respectively.
Fannie Mae has decided the offerings into two groups, and these classes fall into the first group. As per the information made available by the company, the total UPB of the first group is $332.214 million with a total loan to value of 61.1%.
The second group comprises of UPB of $702.8 million and total loan to value of 71.1%. Fannie Mae has decided to settle the transaction on May 29, 2015. Lead Manager for this offering is Credit Suisse Securities while Co-Managers are Jefferies, Great Pacific Securities, and Morgan Stanley.