Freddie Mac seen raising funds after Fannie Mae deal

By Julie Haviv

NEW YORK (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the second-largest U.S. home funding company, may copy Fannie Mae's (FNM.N: Quote, Profile, Research, Stock Buzz) recent multibillion dollar capital raising after reporting its own results next week.

Freddie Mac on Wednesday is expected to report a loss in its first-quarter results, a week after Fannie Mae divulged a bigger-than-expected net loss of $2.51 billion for the same period.

Fannie Mae sold $2.25 billion in convertible preferred stock as well as $2.25 billion of common stock this week to shore up its balance sheet, as it grapples with the worst U.S. housing market downturn since the Great Depression.

Fresh on the heels of those well-received offerings, Freddie Mac may announce a similar sale, investors said.

"It would be reasonable to expect that Freddie Mac will look to raise capital next week," said Moshe Orenbuch, equity research managing director at Credit Suisse in New York.

Freddie Mac will look to raise between $4 billion and $5 billion if the McLean, Virginia-based company does not have to take the write-downs on their asset-backed securities portfolio, Orenbuch said.

"It could be higher than that if they did," adding between $3 billion and $5 billion, he added.

Even so, demand for Freddie Mac's won't be dampened by Fannie Mae's offerings.