Freddie Mac Offloading More Credit Risk to Insurers

Freddie Mac has taken out another reinsurance policy that transfers the risk that mortgages it insures will default. This particular agency credit insurance structure (ACIS) provides coverage based on the actual losses incurred by the government-sponsored enterprise on a referenced pool of residential mortgages for up to $132.5 million. By obtaining this policy, Freddie has sold off much of what it still held in credit risk linked to the first actual-loss bond issued through the agency's larger risk-sharing program.