8-K: Freddie Mac Launches Tender Offer for STACR Notes

Freddie Mac has initiated a fixed-price cash tender offer to repurchase certain Structured Agency Credit Risk (STACR) Notes, aiming to manage its credit risk transfer portfolio.

Summary

• Freddie Mac commenced a fixed-price cash tender offer for 'any and all' of certain STACR (Structured Agency Credit Risk) Notes.
• The offer began on October 9, 2025, and is set to expire at 5 p.m. New York City time on Thursday, October 16, 2025, unless extended or earlier terminated.
• Holders can withdraw validly tendered Notes at any time at or prior to 5 p.m. New York City time on Thursday, October 16, 2025.
• The offer includes specific STACR Notes from various trusts, with original principal amounts ranging from $0 (for STACR 2017-HRP1 B-1, excluding an additional associated eligible series) to $445,000,000 (for STACR 2021-HQA4 M-1).
• The Tender Offer Consideration per $1,000 original principal amount ranges from $1,003.43 to $1,180.00, plus any accrued and unpaid interest.
• Freddie Mac is the sole beneficial owner of the trusts that issued the notes subject to the offer.
• Wells Fargo Securities, LLC and Cantor Fitzgerald & Co. are serving as Lead Dealer Managers, with CastleOak Securities, L.P. as Co-Dealer Manager.
• Global Bondholder Services Corporation is the Information Agent and Tender Agent for the Offer.

Sentiment

Score: 7

Explanation: The tender offer represents a proactive and strategic financial management move by Freddie Mac to optimize its debt portfolio and manage credit risk, which is generally viewed positively. It offers noteholders an opportunity to sell at a premium.

Positives

• Proactive management of Freddie Mac's credit risk transfer (CRT) portfolio, aligning with its mission to transfer credit risk away from U.S. taxpayers.
• Provides an opportunity for noteholders to sell their STACR Notes for cash at a premium to their original principal amount, plus accrued interest, offering liquidity and potential capital gains.
• Reduces Freddie Mac's outstanding debt liabilities and associated interest payments, potentially strengthening its balance sheet.

Negatives

• The repurchase of notes at a premium will incur a cost for Freddie Mac.
• Noteholders who do not tender their notes by the expiration time may miss the opportunity to sell at the offered price.

Risks

• The distribution of materials relating to the Offer and the transactions contemplated by the Offer may be restricted by law in certain jurisdictions.
• The Offer is void in all jurisdictions where it is prohibited by law.

Future Outlook

Freddie Mac's Single-Family Credit Risk Transfer (CRT) programs are designed to transfer credit risk away from U.S. taxpayers to global private capital, serving as the primary source of private capital investment in residential mortgage credit. This tender offer is a continuation of that strategy.

Management Comments

• Freddie Mac announced the commencement of a fixed-price cash tender offer for the purchase of certain STACR Notes.

Industry Context

This tender offer aligns with Freddie Mac's ongoing strategy to manage its credit risk transfer (CRT) programs, which were pioneered by Freddie Mac in 2013. These programs are crucial for transferring mortgage credit risk from U.S. taxpayers to private capital, enhancing liquidity and stability in the housing market. The repurchase of STACR notes is a common liability management technique used by financial institutions to optimize their debt portfolios.

Comparison to Industry Standards

• Freddie Mac founded the GSE Single-Family CRT market with its first STACR notes in July 2013 and introduced its Agency Credit Insurance Structure (ACIS) program in November 2013, establishing itself as a leader in this market segment.
• While specific benchmarks for this particular tender offer are not provided, the general practice of debt repurchase is a standard financial management tool employed by corporations globally to manage their capital structure and reduce interest expenses.
• The offer's structure and terms, including the fixed-price cash offer and specified expiration/settlement dates, are consistent with typical tender offers for structured finance products in the broader financial industry.

Related Party Transactions

• Freddie Mac is the holder of the owner certificate issued by each STACR Trust and, as a result, the sole beneficial owner of each Trust. The tender offer involves the purchase of notes issued by these related Trusts.

Stakeholder Impact

• **Shareholders (Freddie Mac):** Potential positive impact through reduced debt liabilities and optimized capital structure, though the cost of repurchasing at a premium will be a factor.
• **Noteholders:** Provides an opportunity to sell their STACR Notes for cash at a premium to original principal amount, plus accrued interest, offering liquidity and potentially capital gains.
• **U.S. Taxpayers:** Aligns with Freddie Mac's mission to transfer credit risk away from taxpayers through its CRT programs, potentially reducing future taxpayer exposure to mortgage credit risk.

Next Steps

• Holders must validly tender their Notes at or prior to the Expiration Time of October 16, 2025.
• Freddie Mac expects the Settlement Date for notes purchased in the offer to occur on Monday, October 20, 2025.
• Any Notes tendered using the Notice of Guaranteed Delivery and accepted for purchase are expected to be purchased on Tuesday, October 21, 2025.

Key Dates

Keywords

Freddie Mac, STACR Notes, Tender Offer, Debt Repurchase, Credit Risk Transfer, Mortgage-Backed Securities, Fixed-Price Offer, Financial Services, Housing Finance, Liability Management