Freddie Mac today provided its quarterly funding announcement, detailing expected funding activity for the first quarter of 2005.

“In October, we announced that for 2005 we would begin issuing our Quarterly Funding Announcement on an expedited timetable, providing more advance notice to the market about our upcoming debt-funding plans,” said Jerome Lienhard, Freddie Mac treasurer and senior vice president for funding and investor relations.

“Today we are delivering that accelerated timetable by publishing specific information regarding our planned funding activity for the first quarter of 2005, further refining our debt funding program’s hallmarks of transparency and predictability. We understand that the capital markets and investors need comprehensive and timely information, and we are committed to disciplined management of our debt funding program in accordance with our issuance calendar.”

This announcement is neither an offer to sell nor a solicitation of offers to buy any of these securities. Any such offering will be made only by an offering circular and pricing supplement.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home ownership possible for one in six homebuyers in America.

Freddie Mac’s quarterly funding announcement supplements its 2005 reference notes calendar by providing additional details about our expected funding activity for the upcoming quarter. The company’s 2005 funding calendar, which provides optional issuance dates, allows Freddie Mac to offer the marketplace securities at the right size and maturity, with clarity around timing. Additionally, by publishing the Quarterly Funding Announcement before each quarter begins, the market can better anticipate upcoming issuances, thereby increasing the transparency and predictability of Freddie Mac’s debt funding activities.

Freddie Mac continue to publish our Quarterly Funding Summary for the previously completed quarter, which we now will append to our transaction announcements for the months of January, April, July and October 2005. In addition, as a result of the earlier release dates of the Quarterly Funding Announcement, we will post monthly funding summaries on our Debt Securities Web site. These funding summaries provide details about our debt issuances, redemptions, and outstanding balances by product type.

For the first quarter of 2005, the company expects the following issuance levels under its funding programs. All of these activities are subject to market conditions and the company’s needs:

  • Freddie Mac expects to offer $7 billion to $11 billion of Reference Notes securities during the first quarter. As $15.5 billion of Reference Notes securities will mature during the first quarter, the net reduction, excluding repurchases, is expected to be $4.5 billion to $8.5 billion.

  • We intend to use the 10-year issuance date in January and the two-year/three-year issuance dates in February and March. We will forego any five-year issuance in March.

  • Freddie Mac does not plan to issue EuroReference Notes securities during the first quarter.

  • During 2005, euro 4.3 billion of EuroReference Notes will mature. Given current market conditions, Freddie Mac does not expect the amount of EuroReference Notes outstanding by year-end 2005 to differ significantly from its current level of euro 33.4 billion.

  • Freddie Mac expects to issue $2 to $6 billion of syndicated callable notes during the first quarter.

  • Depending on market conditions and asset-liability management considerations, we may conduct one or more periodic repurchase operations involving Reference Notes and/or EuroReference Notes securities during the first quarter.

  • Additionally, the company expects to conduct at least one tender offer transaction during the first quarter for securities with an expired European-style call option.

On Oct. 7, 2004, Freddie Mac announced its 2005 Reference Notes and Reference Bills calendars.

Its 2005 funding plan includes the following features:

  • 2- or 3-year Reference Notes securities may be issued every month, except for August.

  • 5-year Reference Notes securities may be issued in March, June, September and December.

  • 10-year Reference Notes securities may be issued in January, April, July and October.

  • While all issuance dates are optional, we intend to issue at least one new issue of our 2-, 3-, 5- and 10-year maturities of Reference Notes securities during 2005.

  • Minimum issue sizes: New 2-, 3-, 5-, 10-year: $3 billion; Reopening: No minimum size.

  • All dates for quarterly funding announcements and monthly announcements are identified on our 2005 Reference Notes calendar.

  • We will release our quarterly funding announcements for upcoming quarters on the following dates: second-quarter 2005, Feb. 28; third-quarter 2005, June 10; fourth-quarter 2005, Sept. 9.

  • Monthly transaction announcement dates will be used to specify whether there will be a 2- or 3-year issue and announce specific issue size and whether the issue is a new issue or a reopening of an outstanding issue.

  • Euro-denominated securities, including EuroReference Notes securities, will continue to play a role in Freddie Mac’s global funding strategy.

Freddie Mac will provide details on any issuance via the quarterly funding announcements.

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Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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