Freddie Mac, Fannie Mae and Ginnie Mae in more than $9 Billion of Mortgage-Backed Securities Deals in December; More than $185 Billion in 2004; More than $1.1 Trillion Since January 2001

January 1, 2005

In December, Cleary Gottlieb closed 20 Freddie Mac, Fannie Mae and Ginnie Mae REMIC transactions, aggregating more than $9 billion of mortgage-backed securities. The firm represented the underwriters, including Goldman, Salomon, Lehman, Morgan Stanley, CSFB, UBS, Greenwich, Nomura, Morgan Keegan and JP Morgan Chase. This activity brings total agency mortgage-backed deals handled by the firm in 2004 to more than $186 billion and more than $1.1 trillion since January 2001.

These “agency REMIC” transactions involve the issuance of mortgage-backed securities, guaranteed by Freddie Mac, Fannie Mae or Ginnie Mae. Ginnie Mae is an association wholly owned by the U.S. government. Freddie Mac and Fannie Mae are government-sponsored, publicly owned companies. In each transaction, the underlying assets were residential mortgage loans.

Cleary Gottlieb pioneered this type of mortgage securitization, originally known as a CMO (collateralized mortgage obligation), in 1983. REMICs now account for roughly one-third of the total debt issuances on Wall Street. Economists estimate that the existence of this type of transaction has reduced prevailing mortgage rates in the United States by about ½ of 1% per annum during the 20 years since the CMO was introduced.