Fannie Mae to sell preferred stock

WASHINGTON, Dec. 30 (UPI) -- Fannie Mae, the big U.S. buyer of mortgages, plans to sell $5 billion of preferred stock to institutional investors to meet its minimum capital requirements.

The company is selling two types of preferred stock, allowing it to make up an estimated $3 billion shortfall to satisfy the minimum capital standards imposed by its regulator, the Office of Housing Enterprise Oversight, the New York Times reported Thursday.

Last week that office determined Fannie Mae would be "significantly undercapitalized" once it restates its earnings by an estimated $9 billion to correct problems with the way it accounted for derivatives over the last three-and-a-half years.