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Federal Home Loan Mortgage Corporation Message Board

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  • wtblanch5 wtblanch5 May 14, 2011 6:28 PM Flag

    Preferreds Up Big aGAIN TODAY!!!

    That would be much appreciated!

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    • [That would be much appreciated!]

      To get things started, I'm going to cover some of the basics, lol. I'll try to be "neutral" and avoid regurgitating some of my pet theories.

      1. Freddie Mac Preferred Stock Ticker Symbols

      FMCCG.OB FMCCH.OB FMCCI.OB FMCCJ.OB FMCCK.OB FMCCL.OB FMCCM.OB FMCCN.OB FMCCO.OB FMCCP.OB FMCCS.OB FMCCT.OB FMCKI.OB FMCKJ.OB FMCKK.OB FMCKL.OB FMCKM.OB FMCKN.OB FMCKO.OB FMCKP.OB FNMAS.OB FREGP.OB FREJN.OB FREJO.OB FREJP.OB

      I think this is the complete list, but check here, just in case. http://www.freddiemac.com/investors/preferred_stock.html

      2. Variable Rate preferred stocks

      FMCKJ.OB FMCCS.OB FMCCJ.OB FMCCN.OB FMCCM.OB FMCCL.OB FMCCG.OB FMCCI.OB

      Some of Freddie Mac have a variable rate, that is, they "float" based on some index, say Libor or two-year Treasury bonds. Not saying you should avoid them, but if the dividends were ever restored, these preferreds would play a low dividend based on current market conditions.

      3. Prospectuses

      The prospectuses for the preferreds are available here, just hit the link for the one you want to look at.

      http://www.freddiemac.com/investors/preferred_stock.html

      The preferreds have a redemption value of either $25 or $50. I believe they are all non-cumulative, meaning that the dividends that would have been paid during the September 2008 to present period are gone forever. Our preferreds are non-cumulative, which makes them quasi-equity, while cumulative preferreds are more like quasi-debt. By being non-cumulative, quasi-equity, they could be considered "core capital." The preferreds were "Tier 1" capital, which made them a favorable investment for commercial banks and similar investors, prior to the events in Sept 2008.

      4. Financial Statements
      Freddie Mac financial statements are available here.
      http://www.freddiemac.com/investors/er/

      They also provide an "investor presentation--Freddie Mac update update, which they update around the middle of each month
      http://www.freddiemac.com/investors/

      They had decent earnings in the first quarter, which one hopes will be the sea change we've been waiting for. But do your own due diligence!

      • 1 Reply to tencentson1dollar
      • 5. FHFA is the regulator and conservator
        Their website is here
        http://www.fhfa.gov/
        A lot could be said here about the FHFA and their dual role as both regulator and conservator.

        6. Stress Test Document

        In October 2010, the FHFA released projections showing range of potential drawns for Fannie Mae and Freddie Mac

        http://www.fhfa.gov/webfiles/19411/Projections_102110.pdf

        This is a good summary of the "macro" situation facing Freddie Mac. Figure 3 shows the projected combined cumulative Treasury draws for both enterprises.

        One interesting thing is that Freddie Mac has done better than Scenario 1, which was the "best case" scenario. Also, note that Freddie Mac seemed to be in a better situation than Fannie. The impression this gives is that Freddie is essentially a year or two ahead of Fannie Mae, in terms of recovery.

        But do your own due diligence!

 
FMCKJ
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