Great American Sees ‘Freddie Mac’ Holdings Increase

Great American First Savings Bank, the largest holder of Federal National Mortgage Corp. preferred stock, watched its “Freddie Mac” holdings increase in value by $47 million Thursday, the first day that the shares were traded publicly on the New York Stock Exchange.

The San Diego-based S&L; owns 814,178 shares, or 5.4% of the total Freddie Mac preferred shares outstanding, which Great American has bought over the last four years at an average price of $66.92 a share. Freddie Mac shares closed yesterday at $132.75 per share, up $32.75 on the inaugural day of trading.

Freddie Mac’s board approved the public trading of its shares Wednesday. Formerly the shares were bought and sold only by the Federal Home Loan Bank system and its member S&Ls.;

Great American’s pre-tax “paper profit” of $47 million, which a reflects a $7-a-share transfer fee to be levied by Freddie Mac on all stock trades, is based on the assumption that Great American sold all its stock at Thursday’s closing price.

But Great American has no intention of actually booking a profit by selling stock just yet. President Roger Lindland believes that Freddie Mac stock is headed higher and that more profits are to be had by selling later. Industry analysts are predicting Freddie Mac stock could reach prices of $160 a share or more.

The increased value of the Freddie Mac stock will have no effect on Great American’s balance sheet, since the shares are carried on Great American’s books at their original cost until sale, Lindland said.

Still, the stock market seemed to recognize the beneficial effect on Great American of Freddie Mac shares going public. Great American stock closed up $.625 at $11.875 in relatively heavy volume of 148,000 shares traded.

Joe Jolson, an S&L; analyst with Montgomery Securities in San Francisco, said Great American’s paper profit demonstrates his belief that the S&L; has been “very astute” in the buying and selling of securities. He noted Great American’s good timing in its sale of $1.1 billion of loans and marketable securities during first-quarter 1987 that produced an $80 million gain.

Like other S&Ls;, Great American has a right to buy an allotment of 150,000 Freddie Mac preferred shares through its membership in the Federal Home Loan Bank system. Also, Great American obtained more Freddie Mac allotments in recent years by acquiring six S&Ls; in California, Washington, Colorado and Arizona.

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