Freddie Mac STACR Trust 2019-DNA2 Notes Assigned Preliminary Ratings

  • Freddie Mac STACR Trust 2019-DNA2's issuance is an RMBS transaction backed by fully amortizing, first-lien, fixed-rate residential mortgage loans secured by one- to four-family residences, planned-unit developments, condominiums, cooperatives, and manufactured housing to mostly prime borrowers.
  • We assigned our preliminary ratings to the notes.
  • The preliminary ratings reflect our view of the transaction's enhanced credit risk management, credit quality, and credit-linked note structure, among other factors.
 
NEW YORK (S&P Global Ratings) March 14, 2019--S&P Global Ratings today 
assigned its preliminary ratings to Freddie Mac Structured Agency Credit Risk 
Trust 2019-DNA2's (STACR 2019-DNA2's) notes (see list).

The note issuance is a residential mortgage-backed securities (RMBS) 
transaction backed by fully amortizing, first-lien, fixed-rate residential 
mortgage loans secured by one- to four-family residences, planned-unit 
developments, condominiums, cooperatives, and manufactured housing to mostly 
prime borrowers.

The preliminary ratings are based on information as of March 14, 2019. 
Subsequent information may result in the assignment of final ratings that 
differ from the preliminary ratings.

The preliminary ratings reflect:
  • The credit enhancement provided by the subordinated reference tranches, as well as the associated structural deal mechanics;
  • The credit quality of the collateral included in the reference pool;
  • A credit-linked note structure that reduces the counterparty exposure to Freddie Mac for periodic principal payments while also relying on credit premium payments from Freddie Mac (a highly rated counterparty) to make monthly interest payments and to make up for any investment losses;
  • The issuer's aggregation experience and the alignment of interests between the issuer and noteholders in the deal's performance, which in our view, enhances the notes' strength; and
  • The enhanced credit risk management and quality control processes Freddie Mac uses in conjunction with the underlying representations and warranties framework.