(http://finance.) Premises for sale US 25, three months and six months, notes the 10 million, buying a month earlier in a bond more robust. Premises and Fannie Mae must periodically issue bonds that expired debt refinancing.
New York Barclays Capital's Policy Division, "says Rajiv Setia GSE can still obtain financing. "But he also pointed out that, if the financing rate increase, the consumer through higher mortgage rates conduction out. Fannie Mae on Wednesday 20 billion bond will be available also.
Investors worry as the mortgage loan default rates and erosion of the two companies capital, United States Department of the Treasury will be forced to hand the intervention, the purchase of two companies stocks or bonds, causing the value of existing shares are diluted.
Citigroup analyst Bradley Ball on this assumption. In the turmoil around GSE several months later, he still maintains a "buy" rating.
"The recent sell-off on GSE stocks of surprising, because the only drivers obviously is a hint that the Federal Government may be soon reforming GSE capital news," Ball wrote, and that it is not possible to carry out the nationalization of the two companies.
Barrons last week citing sources not named as saying, "two" the possibility of a capital restructuring, and the loss of more than common shareholders and preferred shares and subordinated debt investors.
United States presidential candidate Barack Obama Monday on Iowa voters said that the Government can't allow the two companies into bankruptcy, but he also on the two companies in the property market boom period won its benefit and expected United States taxpayers will come and save them launched accusations.
Citigroup's Ball to him on the two companies of "risk" rating from the "high" to "speculative", on their stock will remain the "buy" rating. Ball will Fannie Mae and premises-us stock price target lowered by more than half, respectively to $ 9 and 6.
Ball wrote, United States Department of the Treasury and the two companies may make choices include, the Ministry of finance for equity investments, regulatory authorities relax capital surplus requirements, the sale of mortgage bonds to provide capital mobility, or wait for the market upturn.
"We continue to focus on market trends," United States Treasury Department spokesman Mike la Lynn said, "we remain on both companies and regulators, and continues to control the situation. ”
A bit familiar with the idea of the sources of finance last Friday on Reuters said the United States Treasury Department continues to believe that the two mortgage finance giants should keep shareholders in the form of ownership.
Mike la Lam said that the Ministry of finance for new consultants GSE-Morgan Stanley is only temporary responsibilities, the material will not be posted to the Ministry of Finance of formal public reports. But the two sides agreed to 1 month before expiration, Morgan and the Ministry of finance will be between the "information exchange".
Premises and stock price over the past few months it tumbled to planned mobilization to 55 million in capital for investors that their shares will be greatly diluted, and fear once the Government take over, their investment will acreage.
However two well-known investors — Pacific investment management company (PIMCO) Chief Investment changge Loomis Sayles's Ross and Dan Fuss last Friday, if the Ministry of Finance also buy-in, you will participate in the sale of preferred stock. Fuss urges companies to release 150 million of convertible preferred stock, which is similar to "ordinary shares of long-term investment."
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