Report title: Credit Update on Freddie Mac
from Fitch Research
1 page (718 word) report published Sep 19, 2008

Price $165.00 available for immediate download
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...On September 7, 2008, the Federal Hous ing Finance Authority (FHFA) placed Freddie Mac (FRE) into conservatorship. Concurrently, the U.S. Treasury and FRE executed a senior preferred stock purc hase agreement (Agreement) under which the Treasury committed to invest up to $100bn in FRE for an indefinite period to keep the company solvent. Following thes e actions, Fitch affirmed FRE s short and long-term Issuer Default Ratings (IDR) and senior and subordinated debt ratings. Fitch downgraded FRE s preferred stoc k rating to C/RR6 from BBB- . Fitch s downgrade of FRE s preferred stock reflects the deep subordination of its preferred stock relative to the senior preferred stock held by the U.S. Treasury. Future dividends on FRE s preferred stock will cease and are not expected to resume under the company s current struct ure. Recovery prospects depend on the level of loss absorption which will be driven by the amount of senior preferred stock injected into FNM during conservatorship....

Report Type: Credit Update
Company(ies): Freddie Mac
Ticker(s): FRE
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