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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Saturday, July 19, 2008 Freddie Mac readies its stock plan The Washington Post WASHINGTON -- Freddie Mac, the troubled mortgage-finance giant, on Friday took a major step with the Securities and Exchange Commission toward selling billions of dollars of stock. The McLean, Va.-based company requested, and the SEC accepted, its formal registration with the agency, an application process it has been undergoing for months. A Freddie Mac spokeswoman said completion of the process is a prelude to the company eventually selling $5.5 billion in stock, a beefing up that it had agreed to accomplish at the urging of federal regulators months ago. The Wall Street Journal on Friday reported that the company might try to raise as much as $10 billion in new shares to investors, a move that analysts said could nearly double its market capitalization. "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," Sharon McHale, a spokeswoman for Freddie Mac, said in an e-mail Friday. "As indicated, we indicated in our Form 10 registration statement (filed with the SEC this morning), Freddie Mac continues to review and consider this and other alternatives for managing our capital." "Our ability to issue additional preferred or common stock will depend, in part, on market conditions, and we may not be able to raise additional capital when needed," Freddie Mac said in its SEC filing Friday. After tumbling by nearly half its value last week, the shares of Freddie Mac and its cousin firm, Fannie Mae, rebounded somewhat this week. Shares of Freddie Mac on Friday closed up 10 percent at $9.18 and Fannie Mae was up 23 percent at $13.40. Through a sale of equity to investors, Fannie Mae raised $7.4 billion in May in a similar effort to improve its financial balance sheet. The company has not said that it has plans to sell more equity anytime soon.

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