Fannie Mae Completes Risk-Sharing Goals, for Now

Fannie Mae plans to do more risk-sharing deals with the private sector, but not probably until next year when its regulator sets more scorecard goals for this.

The most recent deal, a $625 million note pegged to a reference pool of mortgages with an unpaid principal balance of $27 billion, fulfills the 2013 scorecard goal of at least $30 billion in risk sharing when combined with an earlier $5 billion transaction of a different sort, according to a Fannie spokeswoman.

A variety of investors are showing interest in the reference pool-type structure, and 75 participated in the M-1 and M-2 offered tranches of the recent deal. These priced, respectively, at one-month Libor plus a spread of 200 basis points and one-month Libor plus a spread of 525 basis points.

In addition to C deals that reference a loan pool like the recent Connecticut Avenue Securities, Series 2013-C01 transaction, Fannie uses a mortgage insurance-related structure to share risk.

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