Merchants Capital Completes $214M Freddie Mac Q-Series Transaction

CARMEL, Ind., May 23, 2022 /PRNewswire/ — (NASDAQ: MBIN) Leading financial services provider Merchants Capital (MCC), along with Merchants Bank of Indiana (MBI), announces today that it has completed a $214 million Commercial mortgage-backed securities (CMBS) securitization of 14 multi-family mortgages secured by 24 mortgaged properties in a Q-Series transaction sponsored by Freddie Mac.

This is the second such transaction for MCC; last year, MCC obtained a $262 million Q-Series transaction, which consisted of 15 workforce housing properties owned and operated by some of MCC’s largest clients. Unlike the previous transaction, 100% of the securities were guaranteed by Freddie Mac and sold on the market. MCC will continue to outsource pool loans.

the $214 million in loans consisted of 14 multi-family properties in Georgia, Indiana, Michigan, New York and Ohio. The developments vary in size from 60 to 352 units. On a weighted average basis, the portfolio had 93.7% units under 80% Regional Median Income (AMI), 52.1% units under 60% AMI and 26.8% units under 50% AMI . Several properties have been made possible by the Low Income Housing Tax Credits (LIHTC) and the US Department of Housing and Urban Development (HUD). The collateral pool is all adjustable rate mortgages (ARMs) capped at seven years, a new product for the platform.

Due to the characteristics of the underlying mortgages, the certificates are referred to as “Social Bonds” in the Social Bonds framework, published on the Freddie Mac website. Proceeds from social bonds are used to provide liquidity to social impact financial institutions (community development financial institutions, housing finance agencies and other financial institutions), such as MBI. These social impact financial institutions finance affordable housing for low-income communities and underserved populations in accordance with the social bond framework. Freddie Mac engaged Sustainalytics, Inc., a subsidiary of Morningstar, Inc., to independently assess the Social Bonds Framework. MCC has also created its own ESG Social Bond Framework for use in its future transactions, aligning with the four core components of Freddie Mac’s Social Bond Principles, and similarly assessed by Sustainalytics. Ongoing assessment is based on the use of revenue, project evaluation and selection, revenue management and reporting.

“It has been an honor to work alongside multi-family big bankers PNC and Freddie Mac on another incredibly critical project,” said Evan Gibson, Senior Vice President of Capital Markets at Merchants Capital. “Merchants Capital has a long history of finding new, innovative ways to proactively increase our lending capacity for significant properties across the country. We remain committed to our goal of providing housing as a right for all, and the Q-series transaction helps us get there.”

To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, TwitterLinkedIn and Instagram.

ABOUT BANCORP MERCHANTS
Recognized as America’s Top Performing Public Bank by S&P Global Market Intelligence, Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operation of multiple lines of business, including financing and maintenance of multi-family housing and Federal Housing Administration (“FHA”) healthcare facilities; mortgage warehouse financing; retail and correspondent residential mortgage banking; agricultural loans; and the traditional community bank. Bancorp Merchants, with $9.7 billion in assets and $7.5 billion in deposits at March 31, 2022operates primarily through its direct and indirect subsidiaries, Merchants Bank of IndianaMerchants Capital Corp., Farmers-Merchants Bank of IllinoisMerchants Capital Servicing, LLC and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit the Merchants’ Investor Relations page at investor.merchantsbancorp.com.

ABOUT TRADERS’ CAPITAL
Founded in 1990, Merchants Capital is one of the nation’s leading lenders for the refinancing, acquisition, new construction and substantial rehabilitation of multifamily, affordable, senior and student housing. Whether you’re considering tax credit syndication, Freddie Mac, Fannie Mae, HUD/FHA insured, or balance sheet financing, let our personalized services help you achieve your financing goals. Experience the creativity of a small lender, with all the capabilities of a large institution. To learn more about Merchants Capital, visit www.merchantscapital.com.

SOURCE Merchants Bancorp

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