Freddie Mac Partners with Tradeweb to Develop Exchange Path Related to the Single Security Initiative
MCLEAN, Va., Aug. 29, 2018 -- Freddie Mac (OTCQB: FMCC) announced today an arrangement with Tradeweb Markets , a global leader in electronic financial marketplaces, to develop a direct-to-Freddie Mac exchange path for institutional investors related to the Single Security Initiative. The proposed path will allow approved institutions to exchange eligible Freddie Mac Gold PC and Giant PC 45-day securities for the recently announced Freddie Mac 55-day, To-Be-Announced (TBA) uniform mortgage-backed security (UMBS) and 55-day, non-TBA mortgage-backed security (MBS) when Freddie Mac commences its proposed exchange offer, currently expected in May 2019.
"This arrangement will allow investors to use the Tradeweb platform and pursue a familiar approach to exchange their eligible Freddie Mac mortgage-backed securities," said Michael Hutchins, executive vice president of investments and capital markets at Freddie Mac. "This is another important step toward the implementation of the Single Security Initiative in June 2019, paving the way for a combined Freddie Mac and Fannie Mae To-Be-Announced market of Uniform Mortgage-Backed Securities."
In consultation with market participants, Freddie Mac and Tradeweb plan to create a simple, standardized transaction entry point on the Tradeweb platform to submit valid mortgage-backed securities for exchange, accept float compensation and choose a settlement date. Investors would be able to request exchanges through their order management systems' integration with Tradeweb or enter them directly into Tradeweb.
"We're pleased to work with Freddie Mac on a direct exchange path for institutional investors," said Billy Hult, President of Tradeweb Markets. "Tradeweb has facilitated electronic trading in mortgage products for over fifteen years. We are particularly well suited to connect leading institutions that are active in the mortgage market to Freddie Mac in order to enable efficient exchanges."
More information on the Proposed Gold PC and Giant PC Exchange is available online. The 55-day UMBS and MBS securities will be able to be tracked through the Cumulative 45-day to 55-day Exchange Activity File, which can be found on the new Exchange Data Files webpage and the Daily New Issue File.
Freddie Mac expects to begin the proposed exchange offer in May 2019. At that point, holders of eligible Gold PCs and Giant PCs currently are expected to be able to choose between two alternative exchange paths: directly with Freddie Mac as facilitated through Tradeweb or through dealers using Freddie Mac's Dealer Direct SM portal. An overview of both paths and considerations for investors is available here .
This is not an offer to buy or sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC); all other reports Freddie Mac files with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act), excluding any information "furnished" to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information "furnished" to the SEC on Form 8-K.
The financial and other information contained in this press release and in the documents that may be accessed through this press release speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac undertakes no obligation, and disclaims any duty, to update any of the information in those documents.
These materials may contain forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company's control. Management's expectations for the company's future necessarily involve a number of assumptions, judgments and estimates, and various factors could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements. These assumptions, judgments, estimates and factors are discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2017, and its reports on Form 10-Q and Form 8-K, which are available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's website at www.sec.gov . The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of this press release.
About Freddie Mac
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.
Tradeweb Markets builds and operates many of the world's most efficient financial marketplaces, providing market participants with greater transparency and efficiency in fixed income, derivatives and ETFs. Focused on applying technology to enhance efficiency throughout the trade lifecycle, Tradeweb pioneered straight-through-processing in fixed income and now supports marketplaces for more than 25 asset classes with electronic execution, processing, post-trade analysis and market data in an integrated workflow. Tradeweb Markets serves the dealer-to-customer markets through the Tradeweb institutional platform, wholesale trading through Dealerweb, and the U.S.-based retail fixed income community on Tradeweb Direct. Customers rely on Tradeweb to drive the evolution of fixed income and derivatives through flexible trading architecture and more efficient, transparent markets.
Tradeweb operates the world's largest electronic trading platform in the TBA MBS market connecting liquidity providers and consumers. The company developed "round robin" netting to significantly reduce the settlement risk associated with TBA MBS. Additionally, Tradeweb introduced specified pool trading to provide clients with added flexibility in electronically trading MBS CUSIPs.