The Trump administration is pushing ahead with a plan an end to the conservatorship of Fannie Mae and Freddie Mac and move the government-sponsored enterprises (GSE) into the private sector.
As part of a sweeping overhaul of the federal government, the mortgage agencies could undergo a transition into fully private entities through what may be the largest public offering in history, according to a Fox Business report. A plan could be submitted for approval as early as June 2019.
While the size of the public offering has yet to be determined, White House officials forecast that it could easily surpass $100 billion depending on a variety of factors, including timing and scope. In comparison, the largest initial public offering (IPO) to date was for Alibaba Group Holding, which hit $25 billion in 2014.
“It will be a pretty heavy lift to the get the capital, especially in the ranges that people are talking about,” Dan Berger, president and chief executive of the National Association of Federally-Insured Credit Unions, told The Wall Street Journal.
The proposal is currently being crafted by the Treasury Department in consultation with the Federal Housing Finance Agency (FHFA), the agency responsible for regulating both GSEs. The plan is characterized as a cross between a traditional IPO and a secondary IPO, reports Fox Business.
Both Freddie and Fannie have been under conservatorship since 2008 after the government seized the organizations to prevent a financial collapse. Removing their federal charters would bring about more competition in the market, Bloomberg reported in June.
Neither Freddie Mac nor Fannie Mae returned The Daily Caller News Foundation’s request for comment.
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