Freddie Mac eyes new, existing credit derivatives

Mon Nov 1, 2004

NEW YORK, Nov 1 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research) is looking at new and existing credit derivatives to help manage any shifting risk in its mortgage portfolio as the company aims to meet new low- and moderate-income housing goals, Chief Executive Richard Syron said in a conference call on Monday.

The U.S. government on Monday raised affordable housing goals for Freddie Mac and No. 1 U.S. home funding company Fannie Mae (FNM.N: Quote, Profile, Research) . The companies will buy 400,000 more loans during the four-year period than they would without the goals, which go into effect on Jan. 1, according to the Department of Housing and Urban Development.

"It's seeing how we can use existing or potentially new credit derivatives as a way of handling perhaps somewhat different risk profiles that may exist with some of these loans than we traditionally have," Syron said.

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