Freddie Mac begins week-long $30 billion cash tender offer

By Lisa Kerner

Charlotte, N.C., June 1 - Freddie Mac announced on Monday that it will hold cash tender offers the week of June 1 to purchase up to $30 billion in principal amount of targeted securities from investors.

Mohit Sudhakar, senior director of debt portfolio management for Freddie Mac, called the week-long tender offer "a liability management trade" that will be funded using the agency's excess cash on hand.

A spokesperson for Freddie Mac added that the tender offers are not unusual and that they are something the agency does "from time to time" as part of its "game plan."

The tender offer period ends at 5 p.m. ET on June 5, a Freddie Mac news release said.

Designated dealer managers for the offer are Barclays Capital Inc. as lead, with Morgan Stanley & Co. Inc. and Deutsche Bank Securities Inc.

If securities tendered in the offer total more $30 billion, Freddie Mac said it may terminate one or more offers according to a predetermined ranking system.

Freddie Mac said the tender of securities in its offer will be irrevocable and there are no withdrawal rights.

The securities, which had a total principal amount outstanding of $69.9 billion, ranged in maturity from September 2009 to August 2010.

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