Freddie Mac, a leading US buyer of home loans, said on November 27 it plans to sell six billion dollars of preferred stock to help bolster its financial cushion against a housing-related credit crunch.
The pricing of the transaction will be unveiled "in the near term," said Freddie Mac, a stockholder-owned corporation established by Congress in 1970 to support home ownership.
The company said it will offer perpetual preferred stock, shares that do not carry voting rights, including a smaller amount that will be convertible into regular shares.
"The capital raised through this offering will be used to bolster the company's capital base in light of actual and anticipated losses," the company said in a statement.
The company also said it would reduce its fourth-quarter dividend to 25 cents per share, down from 50 cents in the third quarter. The mortgage finance giant announced a week ago worse-than-expected losses of 2.0 billion dollars in the third quarter, saying its investment portfolio had been hit by falling home values and tightening credit markets.
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