Hi, we've made some changes

Freddie Mac calls for cash again

News for Spread Betters

PreviousPrevious
NextNext

There's a new Investor Edition of CMC Markets' spread betting platform... and it's exclusive to DigitalLook.com users...

Get full details about Marketmaker:Investor Edition here. Advertisement

Date: Wednesday 14 May 2008

LONDON (ShareCast) - Government-chartered mortgage buyer Freddie Mac is to return to the market for more funds after posting its third quarterly loss in succession.

The company is to raise $5.5bn through a share issue which is likely to consist of an equal mixture of common (ordinary) and preferred stock. The fund raising plans represent an about turn for the company which said as recently as March that it had no plans to raise more capital after it sold $6bn of preferred stock in the fourth quarter of 2007.

On the positive side, losses were lower than expected and the company’s chief financial officer, Buddy Pisz, said he expected the company to return to profitability in the “near term”, though he declined to give a time frame.

Freddie Mac posted a net loss of $151m in the first quarter, compared with a loss of $133m a year earlier and a loss of $2.5bn in the fourth quarter of 2007. Loss per share was 66 cents, versus expectations of a loss of 92 cents.

Revenue came in above expectations at $1.53bn; analysts had pencilled in a revenue figure of $1.44bn.

Losses related to trading securities and derivatives were considerably smaller at $58m in the first quarter than the $2.1bn logged in the preceding quarter, though this had much to do with changes in accounting procedures. For similar reasons, expenses linked to credit guarantees diminished to $258m in the first quarter from $2.1bn in the preceding quarter.

Digital Look have been voted
"Best Research and Information Provider"

4th Floor, Bankside House, 107 Leadenhall Street, London EC3A 4AF.
Registered in England and Wales (registered no. 3678570).