Fannie (FNMA) Plans $675M Bond Offering (FMCC)
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Fannie Mae (OTCBB: FNMA) might be looking to conduct a debt offering to provide investors a little more action in the U.S. home-lending arena.
According to the WSJ, Fannie is planning to sell about $675 million of debt securities which would provide exposure to a portfolio of $28.05 of mortgages, which was acquired by the company in Q312.
Peer Freddie Mac (OTCBB: FMCC) conducted a similar offering is July.
Both of the GSEs are doing the offerings in conjunction with a mandate put forth by their regulator, the Federal Housing Finance Agency (FHFA), which calls for the reduction of the cost of mortgage defaults to U.S. taxpayers. The companies received about $188 billion in bailout money during the financial crisis of 2008 - 09.
Fannie and Freddie don't directly conduct mortgage operations, but instead buy pools of mortgages from private lenders and package those in securities (known as mortgage-backed securities, or MBSs), which they then sell to investors. Investors' interest is piqued by the increased guarantee that if underlying mortgages go into default, they will still receive payment.
Both Fannie and Freddie are up on Thursday's session.
According to the WSJ, Fannie is planning to sell about $675 million of debt securities which would provide exposure to a portfolio of $28.05 of mortgages, which was acquired by the company in Q312.
Peer Freddie Mac (OTCBB: FMCC) conducted a similar offering is July.
Both of the GSEs are doing the offerings in conjunction with a mandate put forth by their regulator, the Federal Housing Finance Agency (FHFA), which calls for the reduction of the cost of mortgage defaults to U.S. taxpayers. The companies received about $188 billion in bailout money during the financial crisis of 2008 - 09.
Fannie and Freddie don't directly conduct mortgage operations, but instead buy pools of mortgages from private lenders and package those in securities (known as mortgage-backed securities, or MBSs), which they then sell to investors. Investors' interest is piqued by the increased guarantee that if underlying mortgages go into default, they will still receive payment.
Both Fannie and Freddie are up on Thursday's session.
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