- Bruce Berkowitz's presentation of his plan to purchase and recapitalize the mortgage insurance business of Fannie Mae (OTCQB:FNMA +10.5%) and Freddie Mac (OTCQB:FMCC +8.6%) cleverly leads off with quotes from politicians - including the president and FHFA chief Ed DeMarco - calling for private capital to play a larger role in the mortgage market.
- Presentation slides here.
- Bloomberg's Matt Levine's review here.
- His plan actually makes pretty good sense, but with one catch: The conversion of preferred stock for equity in a new, debt-free company with $52B in assets represents somewhere in the area of a $20B-$30B windfall for those owning the preferred.
- The plan also talks about bringing competition to the business even as it creates a new cheaply-capitalized company $52B in size. Far smaller competitors can hardly hope to match.
- Earlier: Ackman joins the fray
Catches aside, plan for Frannie could just work
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| Symbol | Last Price | % Chg |
|---|---|---|
| FNMA | - | - |
| Federal National Mortgage Association | ||