Freddie Mac to Sell 5 Billion in Bills
Freddie Mac announced today that it plans to sell 5 billion dollars in reference bills next week.
This announcement comes just as Fannie Mae announces that its mortgage investment portfolio shrank the fastest rate in two years. The portfolio declined 15.6 percent in November to 722 billion dollars, the smallest since May. The drop in the portfolio comes after the company suffered a $1.5 billion loss in the third quarter and speculated mortgage credit quality would worsen as the U.S. housing slump lingers through 2008.
The two companies have been struggling during the mortgage crisis to obtain enough liquidity to continue to add money into the credit market.
The scheduled offerings are:
- $1.0 billion of one-month bills due Jan. 23, 2008 to be sold on Wednesday and settle Thursday
- $3.0 billion of three-month bills due March 24, 2008 to be sold Monday and settle Wednesday; and
- $1.0 billion of six-month bills due June 23, 2008 to be sold Monday and settle Wednesday.
The bills will be sold over the Internet in a Dutch auction. In such uniform price auctions, successful bidders pay only the price of the lowest accepted bid rather than the actual price as in a conventional multiple-price auction.
To read more about Freddie Mac to sell $5 billion in bills next week head on over to Reuters.