Wall Street Journal (07/18/08) P. A1; Hagerty, James R.; Langley, Monica; Pulliam, Susan
In an effort to avoid a full-blown government bailout, Freddie Mac is considering raising capital by selling as much as $10 billion in new shares to investors. While the government-sponsored enterprise would like to avoid the stricter government oversight that would likely accompany any rescue, such a sale of common and preferred shares could be difficult to complete. For one, the preferred stock would require Freddie Mac to offer a very high rate of return in order to attract buyers. In addition, there is no guarantee that a government bailout still will not be required down the road.
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