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The electronic financial marketplace Tradeweb is developing a direct-to-Freddie Mac exchange path for institutional investors related to the upcoming Single Security Initiative, aka Common Securitization Platform.
Under the plan, Freddie Mac and Tradeweb plan to create a transaction entry point on the electronic platform to submit mortgage-backed securities for investor exchange.
The proposed path will allow approved institutions to exchange eligible Freddie Mac Gold PC and Giant PC 45-day securities for the recently announced Freddie Mac 55-day, TBAs uniform mortgage-backed security and 55-day, non-TBA mortgage-backed security when Freddie Mac commences its proposed exchange offer, currently expected in May 2019, according to a joint statement issued.
"This arrangement will allow investors to use the Tradeweb platform and pursue a familiar approach to exchange their eligible Freddie Mac mortgage-backed securities," said Michael Hutchins, executive vice president of investments and capital markets at Freddie Mac.
The Tradeweb move is big step forward toward the implementation of the Single Security Initiative in June 2019, as it will pave the way for a combined Freddie Mac and Fannie Mae TBA UMBS.
"Tradeweb has facilitated electronic trading in mortgage products for over fifteen years,” said Billy Hult, president of Tradeweb Markets. “We are particularly well suited to connect leading institutions that are active in the mortgage market to Freddie Mac in order to enable efficient exchanges."
