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Press Release

Fannie Mae Prices $857 Million Connecticut Avenue Securities (CAS) REMIC Deal

April 9, 2019

Risk-Sharing Transaction Represents Fourth CAS REMIC Issuance to Date

Matthew Classick

WASHINGTON, DC – Fannie Mae (FNMA/OTCQB) priced its third credit risk transfer transaction of the year, Connecticut Avenue Securities® (CAS) Series 2019-R03, an $857 million note offering that represents Fannie Mae's fourth CAS REMIC transaction. CAS is Fannie Mae's benchmark issuance program designed to share credit risk on its single-family conventional guaranty book of business.

"We are pleased to bring another successful CAS transaction to market with CAS 2019-R03, which was met with robust demand across all classes," said Laurel Davis, vice president of credit risk transfer, Fannie Mae. "This offering continued to draw new investors, building upon a deep and diversified base who value the consistency, liquidity, and strong performance of the CAS program. We expect to return to the market with CAS 2019-R04, a high-LTV loan transaction, at the end of June."

The reference pool for CAS Series 2019-R03 consists of close to 89,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $21 billion. The reference pool includes one group of loans comprised of collateral with loan-to-value ratios of 60.01 percent to 80.00 percent acquired from May through November 2018. The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.

Fannie Mae will retain a portion of the 1M-1, 1M-2, and 1B-1 tranches in order to align its interests with investors throughout the life of the deal. Fannie Mae will retain the full 1B-2H first loss tranche.

Class Offered Amount ($MM) Pricing Level Expected Rating (S&P/Morningstar)
1M-1 $204.126 1-month Libor plus 75 bps BBB+ sf / A
1M-2 $500.109 1-month Libor plus 215 bps B+ sf / BBB-
1B-1 $153.095 1-month Libor plus 410 bps This class will not be rated

Citigroup Global Markets Inc. ("Citigroup") is the lead structuring manager and joint bookrunner and BNP Paribas Securities Corp. ("BNP") is the co-lead manager and joint bookrunner. Co-managers are Bank of America Merrill Lynch ("BofA Merrill Lynch"), Nomura Securities International, Inc. ("Nomura"), J.P. Morgan Securities LLC ("J.P. Morgan"), and Goldman Sachs & Co. LLC ("Goldman Sachs"). Selling group members are Drexel Hamilton, LLC and Siebert Cisneros Shank & Co., L.L.C. 

Fannie Mae's CAS program continues to lead the market in new issuance and is the most actively traded credit risk transfer product in the market. With the completion of this transaction, Fannie Mae will have brought 33 CAS deals to market, issued $39 billion in notes, and transferred a portion of the credit risk to private investors on more than $1.2 trillion in single-family mortgage loans. Since 2013, Fannie Mae has transferred a portion of the credit risk on over $1.6 trillion in single-family mortgages through all of its credit risk transfer programs. In 2018, Fannie Mae introduced the CAS REMIC, which helps to expand the CAS investor base and further enhance the long-term liquidity of the program.

Fannie Mae's deliberate issuer strategy works to build the CAS program in a sustainable way to promote liquidity and to build a broad and diverse investor base. To promote transparency and to help investors evaluate our program, Fannie Mae provides ongoing, robust disclosure data to help credit investors evaluate the program, as well as access to news, resources, and analytics through its credit risk sharing webpages. This includes Fannie Mae's innovative Data Dynamics® tool, which enables market participants to analyze CAS deals that are currently outstanding.

In addition to our flagship CAS program, Fannie Mae continues to reduce risk to taxpayers through its Credit Insurance Risk Transfer (CIRT) reinsurance program and other forms of risk transfer.

About Connecticut Avenue Securities
CAS REMIC notes are issued by a bankruptcy-remote trust. The amount of periodic principal and ultimate principal paid by Fannie Mae is determined by the performance of a large and diverse reference pool. For more information on individual CAS transactions and Fannie Mae's approach to credit risk transfer, visit our credit risk sharing website.

Statements in this release regarding the company's future CAS transactions are forward-looking. Actual results may be materially different as a result of market conditions or other factors listed in "Risk Factors" or "Forward-Looking Statements" in the company's annual report on Form 10-K for the year ended December 31, 2018. This release does not constitute an offer or sale of any security. Before investing in any Fannie Mae issued security, potential investors should review the disclosure for such security and consult their own investment advisors.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit and follow us on