Fannie Mae's Connecticut Avenue Securities Receive Top Honors from Risk Magazine
Unique structure, positive investor feedback gain Fannie Mae recognition in a new award category
WASHINGTON, DC – Fannie Mae’s (FNMA/OTC) Connecticut Avenues Securities™ (CAS) transaction, CAS 2016-C01, has received the first-ever Sovereigns, Supranationals, and Agencies (SSA) Deal of the Year award from Risk Magazine. The Risk awards spotlight the best practices in risk management and derivatives markets that result in positive outcomes for clients. The deal introduced innovative program enhancements to investors, further reducing credit risk exposure and promoting additional liquidity in a developing market. A Risk Magazine editorial panel determined award winners following their review of materials and feedback from clients and industry participants.
“We strive to design our program in a sustainable manner that promotes liquidity and builds a deep and broad investor base,” said Laurel Davis, vice president of credit risk transfer, Fannie Mae. “It is an honor to have our efforts acknowledged by such a highly respected publication as well as our investors.”
Despite turbulent financial market conditions in February 2016, Fannie Mae successfully issued CAS 2016-C01 with the execution of a $945.1 million note offering. Since its inception in 2013, the CAS program has issued more than $21.2 billion in securities and transferred a portion of Fannie Mae’s credit risk to private investors on single-family mortgage loans with an original unpaid principal balance (UPB) of approximately $721 billion, increasing the role of private capital in the mortgage market and reducing taxpayer risk. Through January 18, 2017, we have led the market in volume of risk transfer, transacting in over $25 billion across all of our programs, covering nearly $900 billion in UPB.
Throughout 2016, Fannie Mae led the market in providing transparency to enable market participants to evaluate its industry leading credit risk management practices and participate in its programs. Investors benefit from:
- Data Dynamics™ - An innovative and unique tool, developed to enable users to analyze the vast amount of data made available in support of Fannie Mae’s credit risk sharing programs.
- Enhanced disclosures- Designed in response to feedback from investors, enhanced disclosures for both CAS and Fannie Mae’s historical research dataset help investors to monitor their investments in the program and model credit performance.
- Pricing transparency- The company’s webpages now provide pricing information for its Credit Insurance Risk Transfer™ (CIRT™) reinsurance program, one of the key programs in its risk sharing suite
- Expanded credit risk management resources- New webpages showcase comprehensive processes with video demos of innovative tools such as the proprietary appraisal analytics tool, Collateral Underwriter®.
- A new Commentary and News section- Launched to enable market participants to stay connected with up to date news and information, the content is available on fanniemae.com and can be delivered directly to readers’ email.
Fannie Mae’s robust suite of premier credit risk sharing programs serve both its investor and lender customers. CAS and CIRT programs are further complemented with market-leading execution options for lenders, enabling them to retain a portion of the credit risk on loans or servicing that they originate or acquire.
Total 2016 Credit Risk Transfer Volumes
|Credit Risk Transfer||Risk Transferred
|UPB at time of issuance
|Lender Risk Sharing||0.5||15.9|
|Total 2016 Volumes||$9.8||$330.0|
*Cumulative through January 18, 2017, we issued $25.4 billion covering $881 billion in UPB.
To learn more about Fannie Mae’s most recent awards and achievements, visit: https://www.fanniemae.com/portal/about-fm/awards-achievements.html.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 fanniemae.com and follow us on twitter.com/FannieMae.