The addition of eleven new re/insurers and investors added in the third quarter have brought the number of unique participants in the Freddie Mac Single-Family Credit Risk Transfer (CRT) program this year to more than 175.
Single-Family CRT programs transfer credit risk away from U.S. taxpayers to global private capital via securities and (re)insurance policies, providing stability, liquidity and affordability to the U.S. housing market.
The figure was revealed as the firm reported its Single-Family CRT program delivered “record performance” for the first three quarters of the year, according to the program’s Vice President, Mike Reynolds.
The firm’s Credit Risk Transfer program reported Q3 2022 CRT issuance of approximately $4.7 billion, protecting approximately $136 billion in unpaid principal balance (UPB) of single-family mortgages.
Single-Family CRT program issuances totalled more than $19.7 billion, protecting $495 billion UPB of single-family mortgages for the first three quarters of the year.
The issuances included flagship STACR (Structured Agency Credit Risk), and ACIS (Agency Credit Insurance Structure) transactions, 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, the firm noted.
Reynolds added: “Notably, STACR exceeded its total 2021 issuance over just the first nine months this year. Given significant volatility and increased spreads on the capital market side we will not offer additional STACR issuance for the remainder 2022.”
The firm said it will continue to execute re/insurance transactions via ACIS in the fourth quarter.
Additionally in the first three quarters, Freddie Macy executed three tender offers for certain STACR Notes. More than $4.9 billion current principal balance of Notes were tendered and accepted.
The tendered notes had substantially deleveraged and therefore no longer provided Freddie Mac with capital relief, the firm noted.
Freddie Mac’s Single-Family CRT program has cumulatively transferred approximately $104.5 billion in credit risk on more than $3.2 trillion in mortgages through STACR and ACIS, since its first CRT transaction in 2013.
As of September 30, 2022, approximately 61 percent of the Single-Family mortgage portfolio was covered by credit enhancement.
According to the firm, the industry-leading and award-winning programs attract institutional investors and re/insurance companies worldwide.
