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JCPenney to sell 84 million shares of stock

JCPenney said it will sell 84 million shares of stock in a secondary offering.

Shares fell 5 percent following the news. (What’s the stock doing now? Click here for the latest after-hours quote.)

The retailer said it would use the proceeds for general corporate purposes.

Penney shares fell 15 percent on Wednesday after Goldman Sachs said it expects the retailer’s sales to improve more slowly than expected. The stock rebounded slightly Thursday.

The cost for insurance against a J.C. Penney default has shot back to near record-high levels over the last week.

The company, which has a “CCC ” credit rating from Standard & Poor’s, reflecting a substantial risk in owning its debt, has about $2.6 billion of outstanding bonds.  The company’s benchmark 5-year credit default swap contract price surged by more than 13 percent on Wednesday, according to Markit data.  Read More

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Fannie Mae names Timothy Mayopoulos as new CEO

Fannie Mae, based in Washington, says Mayopoulos, 53, will become president and chief executive on June 18. He replaces Michael J. Williams, who announced in January that he would step down after a successor was found.

The government rescued Fannie and smaller sibling Freddie Mac in September 2008 after the two companies absorbed huge losses on risky mortgages that threatened to topple them. Since then, a federal regulator has controlled the two companies’ financial decisions.

So far, Fannie and Freddie have cost taxpayers about $170 billion — the largest bailout of the financial crisis. It could cost roughly $260 billion more to support the companies through 2014, after subtracting dividend payments, according to the government.

Mayopoulos will be the third CEO of Fannie Mae since the government takeover. Williams oversaw the restructuring of Fannie’s foreclosure-prevention efforts and managed the troubled company’s reorganization.

In his executive roles, Mayopoulos has managed Fannie’s human resources policies, communications and marketing, and government relations, the company said Tuesday.

Pressure has been building for the government to eliminate or transform Fannie and Freddie and reduce taxpayers’ exposure to further losses.  Read More

Spain’s problems add pressure on Europe’s leaders to accelerate crisis response

Spain’s economic problems are deepening, pushing the country closer to an international bailout that U.S. and European officials worry could destabilize the global economy.

The risk that the euro zone’s fourth-largest country may need a massive dose of outside help is forcing the region’s leaders to accelerate weighty decisions they had expected to consider over time. These include deciding whether the euro-zone countries should begin issuing bonds that they all jointly back, a step that would be aimed at reassuring investors skittish about lending money to troubled governments such as Spain’s.

Spain's borrowing costs are increasing.

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Spain’s borrowing costs are increasing.

But extended debate may fast become a luxury as economic activity in Spain slows, the cost of a banking-sector rescue rises and the euro zone’s uncertain future scares off investors.
The release Tuesday of discouraging figures on Spain’s retail sales and exports further contributed to the sense of the country’s fragility. And the resignation of Spain’s central bank head, a month ahead of schedule, highlighted the struggle to fix long-standing problems in the country’s financial sector.  Read More

Mortgage rates tumble back into record territory

Mortgage rates fell this week, with the 15-year fixed rate hitting yet another record low, amid news of weak job growth during the month of March.

Borrowers seeking 15-year mortgages, a popular choice for those looking to refinance, were rewarded with an average interest rate of just 3.11% this week, down from last week’s 3.21% and more than one percentage point lower than a year earlier, according to Freddie Mac (FMCC, Fortune 500)’s weekly mortgage rate survey.  Read More

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