Fannie Mae (OTCQB:FNMA N/A) and Freddie Mac (OTCQB:FMCC N/A) climb in early trading after its federal overseer announced late yesterday that it hired Houlihan Lokey (HLI +6.5%) to help develop and implement a plan to release the government-sponsored enterprises from federal conservatorship.
Nomura Instinet’s Matthew Howlett writes that the milestone supports the firm’s thesis for the GSEs’ recap/release.
Howlett expects conservatorship to end sometime in H2 2020/H1 2021 by way of a consent decree followed by $60B capital raise.
Expects Fannie to price common shares in the offering at $5 each and Freddie to price at $4.50 apiece.
Previously: Houlihan Lokey to help map out Fannie, Freddie release (Feb. 3)
https://seekingalpha.com/news/3537953-fannie-freddie-gain-after-fhfa-hires-financial-adviser
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