Freddie Opens Another Tender Offer

Mortgage giant Freddie Mac (FRE) today opened a tender offer for the purchase of a targeted group of euro reference note securities this week. The four securities in question bear combined principal amounts outstanding of €8.13bn (US$11.19bn) of reference notes due within five years. The offer expires Friday at 12 p.m. EST. Freddie will offer cash to buy back the securities from investors through Goldman Sachs International, the lead dealer manager on the offers, and managers Barclays Bank and Deutsche Bank. Freddie several weeks ago bought back $18.04bn of its securities in attempt to reduce the GSE’s effective short-term debt and move toward larger, longer-term deals with lower rates. “We’re buying back these contractually maturing securities, and over time we’ll be issuing longer maturities,” said Mohit Sudhakar, senior director of debt portfolio management, according to recent media reports. “It’s just a simple liability management trade.” Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.