Freddie Mac (FRE) Finally Tries To Raise Some Cash

Of course, it’s way too late.

WSJ: Freddie Mac executives are sounding out private-equity firms and other investors about the possibility of buying new common or preferred shares in the mortgage company.

But that effort is running up against what may be an insurmountable hurdle: Many investors fear any money they invest now in Freddie or its main rival, Fannie Mae, will be lost later if the U.S. Treasury bails out the companies through a purchase of equity in them. Investors believe such a purchase would likely involve terms that would wipe out the value of previously issued shares.

Meanwhile, pity the poor Freddie spokespeople, who have to keep pretending that Freddie’s problems are the result of a weak stock market:

David Palombi, Freddie Mac‘s chief spokesman… noted that the company remains above its current regulatory capital requirements but has pledged to raise $5.5 billion of capital “given appropriate market conditions.”

See Also: Fannie and Freddie Countdown to Zero

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