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Freddie Mac Sells First SOFR-Indexed Commercial Mortgage Bond

Dec. 18, 2019, 9:02 PM

Freddie Mac has priced the first commercial-mortgage securitization to contain a class of bonds indexed to the Secured Overnight Financing Rate, or SOFR, the heir presumptive to the beleaguered Libor benchmark.

The approximately $765.6 million transaction, which priced on Dec. 12 and is scheduled to close on Dec. 20, is part of the government sponsored enterprise’s ongoing series of CMBS bonds known as “K” deals that are backed by multifamily properties.

The transaction is significant because the securitized-credit markets have been the slowest within fixed income to begin adopting the proposed new benchmark, which is the preferred replacement for Libor...

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