The mortgage finance company will sell $6B in preferred stock priced at $25 a share; preferred shares not convertible to common stock.Big mortgage finance company Freddie Mac on Thursday set a price of $25 a share for the $6 billion in special stock it is selling to help shore up its finances amid strong investor demand for the stock.The nation's No. 2 buyer and guarantor of home loans lost more than $2 billion in the third quarter as more borrowers missed payments on their home loans. Freddie Mac also said it had decided, in light of the robust demand for its special cash-raising offering, to make all 240 million shares of preferred stock not convertible to common stock.
Government-sponsored Freddie Mac said Tuesday that a small portion of the offering would be convertible - which dilutes the value of outstanding shares and could have further depressed the company's battered stock price.The offering has been closely watched by investors gauging the damage inflicted by the turmoil this year in the credit and housing markets.

It was five times oversubscribed, according to the company.

"We are very pleased by the strong investor interest and demand shown in our preferred stock offering," Richard Syron, the company's chairman and CEO, said in a statement Thursday. "We are raising capital in this offering to enable Freddie Mac to continue fulfilling our important housing mission through the current market environment, and better position us to effectively manage the company going forward."
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McLean, Va.-based Freddie Mac (Charts, Fortune 500) also said Tuesday it was slicing its quarterly dividend in half, to 25 cents, as it anticipates additional losses from mortgages gone sour - its first dividend cut since it became a public company in 1989.Typically, preferred stock pays a higher dividend than common stock and carries a stronger claim on the assets of a company if it goes into bankruptcy. The right to convert stock into common shares entitles the holders to vote for company directors and on other key corporate issues.Lehman Brothers and Goldman Sachs are managing the sale of preferred stock, which the company applied to list on the New York Stock Exchange.

With a price of $25 each, the 240 million shares of preferred stock have a fixed dividend rate of 8.375 percent through Dec. 31, 2012, when Freddie Mac will have the option to redeem all or part of the shares.

Full story: money.cnn.com