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Freddie Mac likely to use new capital for growth

Wed May 14, 2008 10:36am EDT

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NEW YORK, May 14 (Reuters) - Freddie Mac (FRE.N) expects to use new capital for growth rather than to cover losses, the company's chief financial officer said on Wednesday.

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In announcing a first-quarter loss, the company earlier on Wednesday said it plans to raise $5.5 billion in fresh capital. Those funds would add to those freed up by easier requirements by its regulator for surplus capital the company needs to hold.

The risk is "greatly reduced" that capital will be used to "fill a hole," Buddy Piszel, chief financial officer of Freddie Mac, the second largest U.S. home funding company, said on a conference call . (Reporting by Lynn Adler and Al Yoon; Editing by James Dalgleish)

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