Freddie Mac launches cash tender offer for STACR securities

MCLEAN, Va. - Freddie Mac (OTCQB:FMCC), a prominent player in the Financial Services industry with a market capitalization of $38.33 billion, announced Thursday it has commenced a fixed-price cash tender offer to purchase any and all of several Structured Agency Credit Risk (STACR) Notes. According to InvestingPro analysis, the company appears overvalued at its current trading price of $11.87.

The tender offer covers multiple classes of STACR Notes, including securities issued by various STACR Trusts where Freddie Mac is the sole beneficial owner. The company has appointed Wells Fargo Securities, LLC and Cantor Fitzgerald & Co. as lead dealer managers, with CastleOak Securities, L.P. serving as co-dealer manager.

The tender period begins Thursday and will expire at 5 p.m., New York City time, on Thursday, October 16, 2025, unless extended. Holders must submit valid tenders by the expiration time, with withdrawal rights available until the same deadline.

According to the announcement, the settlement date is expected to be Monday, October 20, 2025. Holders whose notes are purchased will receive accrued and unpaid interest from the last interest payment date to, but not including, the settlement date.

The total consideration for each accepted note will be calculated based on the original principal amount, applicable factor, and the tender offer consideration specified for each security, which ranges from $1,003.43 to $1,180.00 per $1,000 original principal amount.

The offer includes various STACR securities issued between 2017 and 2022, with original principal amounts ranging from $46 million to $445 million for the different note classes.

Freddie Mac’s Single-Family Credit Risk Transfer programs transfer credit risk from U.S. taxpayers to global private capital through securities and insurance policies. The company launched the GSE Single-Family CRT market in July 2013 with its first STACR notes.

The announcement was made in a press release statement from Freddie Mac.

In other recent news, Freddie Mac reported that the 30-year fixed-rate mortgage averaged 6.26% this week, marking a decline from the previous week’s 6.35%. This drop in mortgage rates has led to a significant increase in refinancing activity, with refinance applications reaching their highest level since January 2022. Despite the decrease, the current rates remain higher than the 6.09% recorded during the same period last year. Additionally, Keefe, Bruyette & Woods has maintained its "Underperform" rating on Freddie Mac shares. The firm cited potential dilution risks for common shareholders in the event of privatization efforts, which they believe will likely begin in early 2026. The probability of success for these efforts has reportedly increased over the past six months. These developments highlight ongoing changes in the mortgage market and investor considerations regarding Freddie Mac.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.