BRIEFCASE FREDDIE MAC STILL SOUND - OFFICIALS.

Byline: - Staff and Wire Services

WASHINGTON - Resolving accounting errors will boost past earnings of the second-largest financer in the home-mortgage market by as much as $4.5 billion but also likely reduce future profits, the new leaders of shaken-up Freddie Mac said Wednesday.

The big government-sponsored company, which ousted three top executives earlier this month, is under criminal investigation by federal prosecutors as the Securities and Exchange Commission examines its accounting. Company officials took pains to reassure investors that the problems were limited to accounting errors and that its financial condition is sound and its ability to manage risk uncompromised.

The anticipated restatement of $1.5 billion to $4.5 billion for the past three years puts Freddie Mac among the biggest corporate accounting debacles of the past year or so. The company said it ``reflects poorly on Freddie Mac's past accounting, control and disclosure practices.'' The accounting changes are expected to reduce income by an equivalent amount during the next few years and make earnings more volatile.

GM's debt issue now $16.9 billion

NEW YORK - Buoyed by investor demand, General Motors Corp. raised its planned debt issue to $16.9 billion Wednesday, making it the largest such offering in U.S. history.

The automaker will sell its debt in the form of bonds, notes and convertibles Thursday, as part of an effort to improve its financial flexibility and help fund its lagging U.S. pension plans. At least some of the debt will be issued through GM's finance arm, General Motors Acceptance Corp.

The previous U.S. record for such an offering was set by WorldCom Inc., which sold $11.9 billion in debt in May 2001.

Before deal makers closed their books Wednesday, GM had planned to sell about $10 billion in debt and other securities. But enthusiastic investor response helped push the figure higher.

The deal calls for $8.5 million in GM debt to be sold in dollars, euros and pounds, and $3.5 billion in convertible bonds, a person familiar with the talks said.

Former officials facing charges

Federal officials charged two former Boeing managers Wednesday with conspiring to steal trade secrets from competitor Lockheed Martin to help their company win an Air Force rocket contract.

Kenneth Branch, 64, and William Erskine, 43, were charged with conspiracy, theft of trade secrets and violating federal procurement integrity laws, according to documents filed in U.S. District Court in Los Angeles.

The action follows a federal lawsuit Lockheed Martin filed earlier this month against Boeing, the two managers and another former employee.

Moody's cuts Sony credit rating to A1

Moody's Investors Service lowered Sony Corp.'s long-term credit rating Wednesday by one notch, citing the weakened outlook for the electronics division. The ratings cut is the first for Sony since Moody's began covering Sony's debt in 1985 and is a recognition that the company is under growing pressure to cut prices and costs to compete with its rivals in Japan, South Korea and elsewhere.

Sony's long-term credit rating is now A1, Moody's fifth-highest ranking. The credit agency kept Sony's outlook at negative, indicating that it could cut the rating further. Sony's credit rating, which affects nearly $20 billion of yen- and dollar-denominated debt, is now on par with IBM and Intel.