Legal

Freddie Draws $6.1 Billion to Cover Liabilities

Mortgage giant Freddie Mac (FRE) this week drew $6.1bn from the preferred stock purchase agreement between the company and the US Treasury Department. The Treasury on Tuesday distributed the funds, which were requested by Freddie’s conservator, the Federal Housing Finance Agency, in a May 12 Securities and Exchange Commission (SEC) filing. FHFA submitted the request on Freddie’s behalf after the government-sponsored enterprise reported in its first quarter earnings statement that its liabilities exceeded its assets by $6.01bn as of March 31. The $6.1bn from the Treasury covers that disparity. After the draw, the remaining amount under Freddie’s funding agreement with the Treasury is $149.3bn, according to an SEC filing Wednesday. 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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