WORLD> America
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WORLD> America
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Freddie Mac reports loss of $821 million
(Agencies)
Updated: 2008-08-06 19:51 NEW YORK - Freddie Mac on Wednesday posted its fourth consecutive quarterly loss, set plans to slash its common stock dividend and warned of more difficulty ahead amid the steepest US housing market slump since the Great Depression.
The second-biggest provider of US residential mortgage funding also affirmed a commitment to raise $5.5 billion in additional capital, but it provided no immediate details of its plan. It repeated that it continues to maintain a surplus over all regulatory capital requirements. For the second quarter, McLean, Virginia-based Freddie Mac reported a loss of $821 million, or $1.63 cents per share, compared with a profit of $729 million, or 96 cents per share, a year earlier. It follows a $151 million loss in the first quarter and brings its cumulative loss over the past four quarters to more than $4.6 billion. "While we expect continued housing and economic weakness will affect our overall performance this year, we continue to maintain a surplus over all regulatory capital requirements," Chairman and Chief Executive Richard Syron said in a statement. "We remain committed to raising $5.5 billion of new capital and will evaluate raising capital beyond this amount depending on our needs and as market conditions mandate." Freddie Mac and rival Fannie Mae faced a storm of stock selling last month as investors speculated the companies would fall short of the capital needed to offset losses sustained from delinquent mortgages. The turmoil led US Treasury Secretary Henry Paulson, in concert with US Federal Reserve Chairman Ben Bernanke, to arrange emergency measures that bolstered government backing for the companies. Dividend slash To help preserve capital, Freddie said it would slash its quarterly dividend, pending board approval, by 80 percent to 5 cents a share from 25 cents a share. |
