Opus Bank in Irvine, Calif., said Tuesday that it has completed a $509 million securitization of its multifamily loans through a Freddie Mac-sponsored "Q-deal" risk-transfer securitization.
Opus Chairman Stephen Gordon termed the deal a "novel" transaction that improved liquidity while reducing its commercial real estate concentration and lowering its levels of risk-weighted assets, its risk-based capital and loan-to-deposit ratios.
"We believe the execution of this securitization strategy enhanced our flexibility and optionality," said Gordon, one of American Banker's top five community bankers to watch in 2017.
Freddie Mac's "Q-deal" programs combine both guaranteed senior bonds and nonguaranteed mezzanine and interest-only bonds, similar to the structures of Freddie's more well-known "K-deal" programs. Unlike "K deals," the "Q" certificates programs include securitizations of multifamily mortgages not originated under Freddie Mac underwriting guidelines, or were not purchased by Freddie prior to securitization.
The Federal Housing Finance Agency has targeted a credit risk-transfer level of at least 80% of multifamily loans purchased or guaranteed by Freddie Mac and Fannie Mae into the hands of private investors in 2017.
Opus, which has assets of $7.5 billion, provides financing for affordable multifamily housing in major metropolitan areas on the West Coast.