DOW JONES NEWSWIRES
Freddie Mac (FRE) on Monday announced plans to repurchase up to
$30 billion of debt securities coming due in the next 15 months as
the mortgage giant continues to deal with surging loan losses.
The debt currently has $69.9 billion in principal outstanding.
The tender offer expires at 5 p.m., EDT, Friday.
Freddie last month reported a loss of $9.85 billion for the
first quarter as mortgage-defaults costs mount and said it will
need another $6.1 billion of capital from the Treasury
Department.
The company didn't say Monday in a statement why it was making
the offering and from where the funds would come. A company
spokesman wasn't available to comment.
Federal regulators seized control of Freddie and larger peer
Fannie Mae (FNM), the two main providers of funds for U.S. home
mortgages, in September as growing losses ate through their thin
layers of capital. The Treasury has agreed to provide as much as
$200 billion of capital apiece to Fannie and Freddie by purchasing
preferred stock paying 10% dividends. With its latest request, that
would bring Freddie's total to about $51 billion.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com