Roundup: Fannie and Freddie, Comstock, Micros
From staff and wire reports
*Shares of Fannie Mae and Freddie Mac tumbled today amid continuing fears the mortgage finance companies will be forced to sell more new shares than anticipated to compensate for losses from the housing slump. Shares have plunged to levels not seen since the early 1990s.
Freddie Mac shares fell $3.20, or 23.8 percent, to $10.26 after earlier sinking to a 16-year low of $9.88. Shares of Fannie Mae fell $2.31, or 13.1 percent, to $15.31.
Because of worries about what will happen, Fannie Mae had to pay a record-high cost to complete a $3 billion debt offering Wednesday. The two-year offering, one of the primary ways the company raises money to fund purchases of home loans, will pay investors a 3.72 percent yield, or 0.74 percentage points above the comparable Treasury securities. That was the widest spread since the two-year offering started in 2000.
Separately, Fannie Mae said it is increasing its investment in the multifamily home market in an effort to boost liquidity and expand rental housing opportunities. The government-sponsored lender is increasing its commitment to buy small multifamily loans of up to $3 million -- $5 million in some markets -- in an effort to meet increasing demand for rental housing.
*Comstock Homebuilding of Reston said it retained FTI Consulting of Baltimore to help it work with its lenders on operational and financial strategies. In connection with that move, Comstock has hired FTI's Brad Foster as its interim chief restructuring officer.
Comstock also said it will stop making some interest payments while it tries to negotiate with lenders. The copmany said its outstanding indebtedness as of June 30 was $157 million.
*Micros Systems, a Columbia company that makes software for the hospitality and retail industries, said its board has approved the repurchase of 2 million additional shares of its common stock over the next three years. The company has already bought back most of the 2 million shares the board approved for repurchase in November 2007.
*Old Dominion Electric Cooperative said it signed an agreement with Richmond-based energy supplier AES to purchase wind-generated power. The cooperative is the primary power provider for 12 member electric distribution cooperatives in Delaware, Maryland and Virginia. It will buy energy output and renewable energy credits from an AES wind energy project in Pennsylvania.
Please email us to report offensive comments.
The comments to this entry are closed.