Fannie Mae (QB)【FNMAS】株式ニュース

Winners and Losers in a Fannie, Freddie IPO
How parties including John Paulson, Bill Ackman and the Treasury fare depends on how a potential offering is structured
By Corrie Driebusch

Dec. 4, 2025 2:04 pm ET

President Trump and his appointees have spent months teasing a blockbuster stock offering of Fannie Mae that could partially free the mortgage giants from government ownership and reap billions of dollars.

Commerce Secretary Howard Lutnick said the administration is “well down the road on getting a deal done” in a CNBC interview Wednesday.

The challenge is determining how to structure such a complex transaction. It would likely involve the U.S. Treasury selling a portion of the stake it took in the firms in the 2008-09 financial crisis.

In addition to considering the government’s best interests, any initial public offering plan needs to take into account both entities’ common and junior preferred shareholders. Either class could challenge a deal they see as unfair.

Another sensitivity is the impact on the mortgage market. Fannie and Freddie play a pivotal role by buying up mortgages and packaging them to sell to investors, whom they guarantee payments even if borrowers default. This empowers U.S. lenders to make more 30-year fixed-rate mortgages.

For months, the biggest banks have been vying for roles on a potential transaction by pitching solutions to its uniquely thorny issues. Bankers and investors expect the Trump administration to begin sharing details of its plans by the end of the year.

Here are the parties who stand to win or lose, depending on how a deal is structured:

The U.S. Treasury
The Treasury holds warrants to purchase nearly 80% of the common stock of Fannie Mae and Freddie Mac, as well as roughly $190 billion worth of senior preferred shares.

When the government put the firms under conservatorship, it wanted to ensure taxpayers—via the Treasury—were adequately repaid for the risk they took to stabilize the mortgage market.

The senior preferred shares originally included a 10% dividend. That proved to be too much of a burden, so the government established a controversial mechanism called the “net worth sweep” that would pay the Treasury Fannie’s and Freddie’s net income instead.

That changed again during Trump’s first term, when the government said the entities could retain any income. The catch was that the Treasury would get any accrued income—now estimated to be hundreds of billions of dollars—before more junior investors are paid.

How to deal with this liability is a major debate. Some investors argue that the government has already been repaid more than what the Treasury initially contributed in 2008 and so should forgive the rest owed. But some economists and academics say that would shortchange taxpayers.

Junior preferred shareholders
Below the senior preferred shares sit roughly $35 billion in outstanding junior preferred shares, according to a 2024 Congressional Budget Office report. Most of these shareholders are institutional investors such as Capital Group and John Paulson’s Paulson & Co.

Paulson is a Trump donor who was briefly considered for Treasury Secretary but dropped out of the running citing “complex financial obligations.”

The fate of junior preferred shareholders hinges on the type of deal the government strikes. These shares are junior to the senior preferred shares held by the government, which means they don’t get paid dividends until after the government is paid.

Dividends on the shares were suspended during the financial crisis and the shares are currently trading on the over-the-counter market below face value. Some shareholders have been pitching ideas for how to treat their shares in an IPO to people close to Trump and some have discussed suing if they don’t like the deal, according to people familiar with the matter.

Common stockholders
After the government placed Freddie and Fannie into conservatorship, few investors wanted to own their common stocks, which for years traded on the over-the-counter market for pennies.

One exception is Bill Ackman’s Pershing Square, which disclosed a big bet on the mortgage giants in 2013. The idea was that their shares would soar if they eventually emerged from government control or were otherwise restructured.

There were 1.8 billion common shares in Fannie and Freddie combined as of 2024, according to the CBO report. In addition, the Treasury Department’s warrants give it the option to buy up to 7.2 billion shares for a nominal price.

As rumors circulate that a Fannie and Freddie stock offering could be imminent, their common stock prices have soared. They have roughly tripled this year.

Common stockholders could reap big gains or lose money, depending on whether the government requires repayment.

Ackman has said he is the largest common shareholder in both entities, with a combined stake worth roughly $2 billion as of November.

He has argued that the government should forgive what it is owed, which should cause the common share prices to rise, and then exercise its warrants. Instead of selling shares in a stock offering, he thinks the government should simply move Fannie and Freddie’s common shares to trade on the New York Stock Exchange.

Mortgage investors
Since Fannie and Freddie have been under government control for so long now, industry players have warned that reduced government support could push up the cost to own a home.

That is because the increased risk would drive investors to demand higher premiums in the mortgage-backed securities market. Those higher premiums would trickle through to homeowners in the form of higher mortgage rates.

Federal Housing Finance Agency Director Bill Pulte has indicated Fannie and Freddie would remain in conservatorship in any transaction, but hasn’t provided details on how that might work. Some bankers have privately warned that Fannie and Freddie investors may not want to own shares subject to the whims of whichever political party is in charge, which could complicate an effort to keep them in conservatorship in a public offering.

A transaction soon would come at a fragile moment in the mortgage market, where recent upheaval at Fannie and Freddie has already rattled some lenders and investors, The Wall Street Journal reported.

Write to Corrie Driebusch at corrie.driebusch@wsj.com, Gina Heeb at gina.heeb@wsj.com and AnnaMaria Andriotis at annamaria.andriotis@wsj.com
https://www.wsj.com/finance/regulation/fannie-freddie-ipo-winners-losers-a0cb3a51