Replies to post #64 on Freddie Mac, 8.375% Non-Cumulative Perpetual Prefe (FMCKJ)

[philipmax]

Beta... Wouldn't it be better if they start paying Div. on the FMCKJs rather than call them for redemption?

They recently, unilaterally, changed the "rate" on these PFD to 6.42%+LIBOR. Current anticipated yield, about 7.875%.

Two problems with that.

1- I'm not sure they can flip the rate on PFD after issue?

2-If the div. is suspended, and they anticipate redemption in the future, why fool around with the security if you don't expect to pay the div. anyway?

Very strange!