Freddie Mac's subprime losses may hit $5 billion: CS

Reuters reports:

NEW YORK (Reuters) - Freddie Mac (NYSE:FRE - News) may report a loss of between $1 billion to $5 billion on its subprime AAA portfolio, Credit Suisse said on Monday, sending shares in the second-largest U.S. mortgage finance company sharply lower.

"While Freddie's AAA subprime securities likely have substantial subordination, if the recent credit spread widening does not reverse over the coming quarters, we believe that Freddie could recognize an other-than-temporary impairment of between $1-5 billion," the brokerage said in a research note.

The losses may force Freddie to sell some of its portfolio holdings or raise capital by issuing preferred stock, the note added.

Just think,some in Congress want Freddie to take on more debt.Imagine that.