Freddie Mac seeks additional $10.6 billion from federal government
- May 6, 2010
McLean-based Freddie Mac is seeking an additional $10.6 billion from the federal government after reporting an $8 billion loss in the first quarter.
The results included $1.3 billion in dividend payments to the U.S. Treasury, which received stock when it took over Freddie Mac and Fannie Mae in September 2008 and put them into conservatorship.
The quarter’s results also reflected credit losses of $5.4 billion, a derivative loss of $4.7 billion because of a decline in long-term rates and net interest income of $4.1 billion.
Freddie Mac adopted new accounting standards this year, which make its results hard to compare to previous quarters. In the first quarter of last year, it reported a $10.4 billion loss.
“Our first quarter 2010 financial results were driven significantly by the required adoption of new accounting standards, along with continued weakness in the housing market,” Ross J. Kari, Freddie Mac’s CFO, said in a statement. “Upon adoption of the new accounting standards we added $1.5 trillion of assets and liabilities to our balance sheet, and the cumulative effect of these changes was a one-time net decrease of $11.7 billion to total equity. The impact on Freddie Mac was significant relative to others as the nature of our business model amplified the impact of these changes.”
The company says it is seeking the $10.6 billion from the government because of its $10.5 billion net worth deficit. It expects to receive the funds by June 30.