Fannie Mae, Freddie Mac Issue Request for Proposals to Hire Financial Advisor

Fannie Mae, Washington, D.C., and Freddie Mac, McLean, Va., announced yesterday they will issue requests for proposals to hire an underwriting financial advisor to assist in developing and implementing a plan for recapitalizing and “responsibly ending” their conservatorship.

The financial advisor would work closely with the government-sponsored enterprises and the Federal Housing Finance Agency to “consider business and capital structures, market impacts and timing and available capital raising alternatives,” among other items.

Fannie Mae CEO Hugh R. Frater said engaging a financial advisor is an “important milestone” in meeting Fannie Mae’s 2020 FHFA scorecard objective to prepare a responsible transition plan for a potential exit from conservatorship.

“While we are fulfilling our mission and helping to keep people in their homes during this national emergency, we also remain committed to ensuring a responsible exit from conservatorship,” Frater said. “Today’s announcement is a significant step on that path, and we look forward to making a timely selection in the competitive process.”

Freddie Mac CEO David Brickman said the financial advisor could ultimately play a role in any potential recapitalization transactions in the future.

“Even as we work to stabilize the housing markets during this unprecedented pandemic, Freddie Mac has remained focused on exiting conservatorship responsibly,” said David Brickman, Freddie Mac CEO. “Today we begin the competitive selection process for a financial advisor that will ultimately facilitate our return to full private capital ownership. This is a significant milestone, and we look forward to making a thoughtful selection quickly.”