Mortgage financier Freddie Mac took a step toward issuing common and preferred stocks to help bolster its balance sheet on Friday when the Securities and Exchange Commission (SEC) accepted its registration statement filed earlier in the day.
Freddie has committed to raising at least US$5.5 billion in capital amid a turbulent time for it and fellow mortgage giant Fannie Mae.
The pair have been hit hard over the past year by mounting losses tied to the downturn in the mortgage market and the government was forced to step in over the weekend to reassure Wall Street of the companies’ solvency.
Washington-based Fannie Mae raised US$7.4 billion earlier this year in a bid to strengthen its balance sheet.
McLean, Virginia-based Freddie Mac had indicated plans to raise US$5.5 billion, but has been waiting to initiate the offerings because its stock is not yet registered with the SEC.
“We have committed to [the Office of Federal Housing Enterprise Oversight] to raise $5.5 billion of new core capital through one or more offerings, which will include both common and preferred securities,” Freddie said in a statement.
“The timing, amount and mix of securities to be offered will depend on a variety of factors, including prevailing market conditions, and is subject to approval by our board of directors,” it said.
Freddie Mac reported a first-quarter loss in May of US$151 million and said it set aside US$1.2 billion for losses as a result of rising delinquency rates and falling home prices. Moody’s Investors Service has downgraded Freddie’s financial strength rating, projecting up to US$7.5 billion in losses from soured mortgages over the next two years.
Friday’s filing paves the way for the issuance of new stock.
The filing does not guarantee Freddie will issue shares, but Freddie indicated in the filing that was one option it is considering to help improve capital ratios.
Apart from issuing new stock, Freddie said it was considering limiting growth in its portfolio, or reducing the size of the portfolio and lowering its quarterly dividend.
Fannie and Freddie hold or back US$5.3 trillion of mortgage debt, about half the outstanding mortgages in the US.
Analysts widely agree that the sustainability of Freddie and Fannie is vital to helping prevent the already battered real estate market from getting worse.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS