Loomis Sayles' Fuss: Fannie Mae preferreds "cheap"

NEW YORK (Reuters) - Loomis Sayles' Dan Fuss, one of the biggest and most widely followed U.S. bond managers, said on Thursday that the beaten down preferred stock of U.S. mortgage finance company Fannie Mae is "outstandingly cheap."

Fuss added that a lot of bad news has been priced into Fannie's (FNM.N) preferred shares.

The common stock and preferred shares of Fannie Mae and its rival Freddie Mac have taken a beating in recent days after a U.S. plan to rescue both left doubts about whether shareholders will be left in the lurch.

Fuss said, "the preferreds are selling at single-B levels."

Moody's cut Freddie Mac and Fannie Mae's preferred share ratings one notch to "A1" on Tuesday, the fifth-highest investment grade, from "Aa3," and said it may cut them again.

(Reporting by Jennifer Ablan; Editing by Chizu Nomiyama)