Trump administration in early stages of possible $100B offering of Fannie Mae, Freddie Mac: Exclusive

Trump administration in early stages of possible $100B offering of Fannie Mae, Freddie Mac: Exclusive

FOX Business’ Charlie Gasparino on how the White House is trying to release Fannie Mae and Freddie Mac from federal control.

The Trump administration is in the nascent stages planning what people inside the government say could be history’s largest public offering as it looks to release the mortgage agencies Fannie Mae and Freddie Mac from government control, FOX Business Network has learned.

The size of the public offering could easily exceed $100 billion, Trump administration officials concede, and it largely depends on the size and scope of the mortgage outfits’ mandate when the government finally releases them from government-controlled “conservatorship,” which was imposed on the agencies during the 2008 financial crisis.

In recent weeks, Wall Street bankers have spoken with Trump administration officials informally on the broad outlines of the stock deal that will finance the final leg of Fannie and Freddie’s recapitalization plan, according to financial executives and administration officials with knowledge of the matter. They described the possible stock sale as something of a hybrid between a traditional initial public offering and a secondary offering of stock, or a “re-IPO” since both agencies already have outstanding shares even if the stock sales will amount to a watershed moment in their post-conservatorship existence.

The largest IPO in history is Alibaba Group’s $25 billion sale of stock in 2014. The largest secondary offering appears to be Petroleo Brasileiro, also known as Petrobras; the Brazilian government-controlled oil and gas company raised $70 billion in a follow-on sale of stock in 2010.

Government officials are eying the offering for some time in 2020, and they say the exact size, timing, and even likelihood are all in flux given the complexity of the reform effort that begins with gaining consensus from the various factions within the Trump administration on a framework for the future of Fannie Mae and Freddie Mac. 

FOX Business’ Jennifer Schonberger previously reported the new Federal Housing and Finance Agency chief Mark Calabria was considering an IPO for Fannie and Freddie. Read more

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