Freddie Mac (FRE) May Have Difficult Time Raising Cash - WSJ

An article in the Wall Street Journal today said Freddie Mac (NYSE: FRE) executives may have a hard time selling investors on acquiring newly issued common shares. Freddie Mac executives are talking to private-equity firms and other investors about the possibility of making an investment into the company.

Currently, there is widespread talk about the U.S. Treasury bailing out Freddie Mac or Fannie Mae (NYSE: FNM), therefore investors feel the risk is too high and any deals could include terms which wipe out previously issued shares.

David Palombi, Freddie Mac's chief spokesman told the WSJ, "Senior management has been talking with a wide array of possible investors this week." He did note that Freddie Mac remains above its current regulatory capital requirements but has pledged to raise $5.5 billion of capital "given appropriate market conditions."

Freddie Mac is a stockholder-owned corp established to support homeownership and rental housing. Federal National Mortgage Association (Fannie Mae) is engaged in providing funds to mortgage lenders. [SM]
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