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Freddie Mac to delist final NYSE security

EditorBrando Bricchi
Published 06/11/2024, 01:55 PM

MCLEAN, Va. - Freddie Mac , the mortgage finance company, announced today that it plans to voluntarily delist its last security traded on the New York Stock Exchange. The bond, known as Debt Securities Due 2025 with CUSIP 3134A2HG6 and trading under the ticker symbol FMCC (OTC:FMCC) 25Z, was originally issued in 1998. The company will file a Form 25 with the Securities and Exchange Commission (SEC) and the NYSE after a required ten-day notice period to proceed with the delisting.

The expected last day of trading for the bond is anticipated to be on or around July 1. Freddie Mac has not made arrangements for the bond to be listed on another national securities exchange or for quotation in any other medium. This move follows the delisting of Freddie Mac's common stock from the NYSE in 2010, which was directed by its conservator, the Federal Housing Finance Agency.

The decision to delist is attributed to the unnecessary burden of compliance with NYSE rules and administration, considering Freddie Mac's current status under government conservatorship. The organization has been under this conservatorship since the 2008 financial crisis, which allows for more direct government oversight and control.

Freddie Mac's role in the housing market is to provide liquidity, stability, affordability, and equity, particularly through all economic cycles. Since its inception in 1970, it has been instrumental in assisting millions of families in buying, renting, or retaining their homes.

The press release emphasizes that this announcement is not an offer to buy or sell any Freddie Mac securities. It also clarifies that the information provided should not be the sole basis for investment decisions, and potential investors should consult their legal and financial advisors. The information from the company's financial reports and other filings with the SEC should be referred to for a comprehensive understanding of any security offered by Freddie Mac.

This news is based on a press release statement from Freddie Mac.

In other recent news, Freddie Mac has reported a series of changes in the 30-year fixed-rate mortgage rates. The rates have seen fluctuations, with a noteworthy dip below 7% for the first time since early April, averaging at 6.94%. However, a consecutive increase was observed for five weeks, reaching an average of 7.22%. Later, the rates showed stability around 6.82%, a slight increase from the previous week's 6.79%. Additionally, another decrease brought the rate down to an average of 6.79%.

The Chief Economist at Freddie Mac, Sam Khater, attributes these rate adjustments to data indicating a slowdown in economic growth. Despite signs of decreasing inflation rates, Khater does not anticipate a significant drop in mortgage rates in the near future. However, he notes an improvement in housing inventory, which could potentially moderate the growth of home prices.

These recent developments are based on data from Freddie Mac's Primary Mortgage Market Survey, which tracks conventional, conforming home purchase loans for borrowers who place a 20 percent down payment and possess excellent credit. These changes in mortgage rates are significant to potential homebuyers and the broader economy, influencing consumer spending and the construction industry.

InvestingPro Insights

Freddie Mac (FMCC) has been a topic of interest for investors given its significant role in the housing finance sector and recent financial performance. According to the latest data from InvestingPro, Freddie Mac has a market capitalization of approximately $4.93 billion as of the first quarter of 2024. Despite a negative P/E ratio of -56.65, reflecting challenges in profitability, the company has shown a remarkable revenue growth of 35.37% over the last twelve months leading up to Q1 2024.

Investors should note the company's impressive gross profit margin, which stands at 100% for the same period. This could indicate strong operational efficiency or a unique accounting situation related to the company's business model as a government-sponsored entity in the mortgage market. Additionally, the stock has experienced a high return over the last year, with a 244.36% increase in total price return, which aligns with the InvestingPro Tip highlighting a large price uptick over the last six months.

Moreover, InvestingPro Tips suggest that while Freddie Mac's stock price movements are quite volatile, the company is expected to become profitable this year, which may offer some reassurance to investors concerned about the company's recent decision to delist a security from the NYSE. This could be an opportune moment for investors to explore the company's potential, keeping in mind the significant return over the last week and the strong return over the last three months.

For those interested in a deeper analysis, InvestingPro offers additional tips on Freddie Mac, which could further inform investment decisions. Use the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a total of 12 InvestingPro Tips for Freddie Mac at https://www.investing.com/pro/FMCC. These tips could provide valuable insights into the company's financial health and future outlook, especially in light of its evolving relationship with the public markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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