Freddie Mac And Fannie Mae Preferred Stocks As Special Situation Investments

Seeking Alpha - July 10, 2015 - July 13, 2015

By Wayne Olson

Freddie Mac (OTCQB:FMCC) currently has $14.109 billion of preferred stock on its balance sheet at redemption value. Freddie Mac has a number of preferred stock issues.

Freddie Mac is in conservatorship and has not paid preferred dividends since the second quarter of 2008. Indeed, FMCKJ only paid dividends for two quarters before dividends were suspended. 240,000,000 shares of FMCKJ were issued on December 4, 2007 at $25 per share, with proceeds of $5.91 billion to Freddie Mac and the initial dividend rate was set at 8.375 percent (which was to be reset at no less than 7.875 percent beginning in 2013). Thus, even at a market price of about $3.75 per share, FMCKJ currently has a market cap of about $900 million.

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