LutNick Speaketh Details on Planned GSE IPO
Mike SP
A public offering of stock in Fannie Mae and Freddie Mac “could well be a this-year thing,” Commerce Secretary Howard Lutnick said on CNBC Thursday. But he noted that it won’t be a large offering.
“Do we want to sell a lot?” he asked rhetorically. “No. What we want to do is show a mark-to-market, right? The president shows that these are assets that we, the American taxpayers, own, and look how much they’re worth. Look how well they do.”
Lutnick reiterated that the effort will be done in a way to keep the price of a mortgage “as low as mathematically possible.”
But Lutnick’s comments also hint that the Trump administration doesn’t believe the stock offering should help recapitalize the government-sponsored enterprises, a key step in allowing them to exit conservatorship. His insistence that the GSEs belong to the American people suggests the proceeds from any stock sale will go to pay down the debt rather than contribute to the net worth of the two companies.
For more details on the proposed public offering, see Inside The GSEs later today.