US mortgage giant in share issue
US mortgage giant Fannie Mae is to sell $7bn of shares to raise money to cushion itself against losses in sub-prime home loans. The additional capital will allow the company to "manage increased risk in the housing and credit markets". Fannie Mae, which finances or guarantees one of every five home loans in the United States, will also cut its dividend by 30%. This follows similar moves by smaller rival Freddie Mac. Fannie Mae last month reported a third-quarter loss of $1.4 bn. Bad times The company said that worsening housing and credit markets will hurt its fourth quarter and 2008 results. "Fannie Mae has a responsibility to serve the mortgage market in good times and in times like these," Daniel Mudd, Fannie Mae's chief executive officer, said in a statement. "The steps we are taking today are designed to enable us to meet that responsibility." Its sister firm Freddie Mac said last month it is to sell $6bn of shares to cover more bad debt losses. H...