Freddie to Buy $5.9 Billion of Securities

Mortgage giant Freddie Mac (FRE) plans to buy back €4.28bn (US$5.92bn) of its euro Reference Notes securities through the tender offers that closed Friday at 12 p.m. EST. The four securities in question bear combined principal amounts outstanding of €8.13bn of reference notes due within five years. The government-sponsored enterprise said today the tendered securities must be delivered to one of the dealer managers, Goldman Sachs International, Barclays Bank or Deutsche Bank by the settlement date on Thursday. Freddie first made the offers on June 15. Freddie several weeks ago bought back $18.04bn of its securities in attempt to reduce the GSE’s effective short-term debt and move toward larger, longer-term deals with lower rates. “We’re buying back these contractually maturing securities, and over time we’ll be issuing longer maturities,” said Mohit Sudhakar, senior director of debt portfolio management, according to recent media reports. “It’s just a simple liability management trade.” Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.

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