The Trump administration has its sights set on bringing Fannie Mae (FNMA) and Freddie Mac (FMCC) public in initial public offerings (IPOs) by the end of the year that would total a combined valuation of $500 billion or more, according to the Wall Street Journal.
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The administration is considering selling between 5% and 15% of its shares in the companies and believes the IPOs could raise $30 billion, according to sources close to the matter. Fannie Mae and Freddie Mac have been under government conservatorship since the 2008 financial crisis as mortgage defaults plagued the economy. Both companies provide liquidity to the mortgage market by buying and then securitizing mortgages with a government guarantee of repayment.
Major Bank CEOs Attend Fannie Mae and Freddie Mac IPO Discussions
CEOs from six major banks, including Goldman Sachs (GS) and JPMorgan Chase (JPM), have traveled to Washington, D.C. in recent weeks to discuss the IPO plans with President Trump. Federal Housing Finance Agency (FHFA) Director Bill Pulte attended the meetings as well. The FHFA oversees the two companies.
“I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” said Trump in a Truth Social post in May.
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