Nice price for Fannie Mae stock sale
Fannie Mae (FNM) raised $4.5 billion by selling preferred and common stock. The company sold 82 million common shares at $27.50 apiece and 45 million shares of noncumulative mandatory convertible preferred stock paying an 8.75% dividend. The sale, completed Thursday night, comes two days after Fannie announced its third straight quarterly loss and said it would raise new capital to rebuild its cushion against future losses on souring mortgage loans.
While the sales will dilute the stake of existing shareholders, Fannie managed to get a good price for its common shares: Thursday’s price represents just a 3% discount to the stock’s closing price Monday, the day before Fannie announced its capital-raising plan. Shareholders in AIG (AIG), which set plans Thursday to raise $12.5 billion in new capital through common and equity-linked offerings after its second straight quarterly loss, should be so lucky. Their shares were down 10% in premarket trading Friday.
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