Freddie, Fannie stock surges
Troubled mortgage finance giant Freddie Mac files with SEC amid reports that it is mulling stock issuance.
NEW YORK (CNNMoney.com) -- Shares of battered mortgage finance giants Fannie Mae and Freddie Mac surged Friday on reports that Freddie was moving closer to a stock offering.
Freddie (FRE, Fortune 500) stock rose 10% Friday. The stock of Fannie (FNM, Fortune 500) was up 22%.
The Securities and Exchange Commission on Friday accepted a request by Freddie to register with the agency, the company said in a statement, adding that it had filed financial statements dating back to 2005.
Freddie spokesman Sharon McHale said that her firm, unlike most companies, has been able to issue stock without registering with the SEC. But Freddie decided to register and the process has been ongoing since early this year, she said. She also said it does not apply to any specific issuance.
Freddie has been planning since March to issue $5.5 billion worth of stock, McHale said. But she said the details depend on day-to-day changes in the stock market.
"The timing, the amount and the mix of securities will depend on a number of factors, including prevailing market conditions," said McHale.
McHale would not comment on a Wall Street Journal story Thursday that said Freddie was mulling a $10 billion stock issuance.
Without counting Friday's gains, Freddie and Fannie shares have fallen more than 70% year-to-date as a result of the imploded housing sector and the government's plan to prop up the battered companies.
Together, these companies own or back about $5 trillion worth of mortgages, or half the U.S. market. Raising funds through stock issuance could help Freddie avoid a government rescue.
On Sunday, the Treasury Department and Federal Reserve unveiled a rescue plan that would bolster the two mortgage finance giants, which play crucial role in the U.S. economy. 
