Fannie, Freddie OTC Shares Climb As Trump Prepares To Take Firms Public
May 28 (Reuters) - Over-the-counter (OTC) shares of Fannie Mae FNMA.PK and Freddie Mac FMCC.PK jumped in premarket trading on Wednesday after U.S. President Donald Trump said he was working on taking the housing giants public in a post on Truth Social.
Fannie shares rose 16.6% to $12.30, while Freddie gained 18% to $9 before the bell. Their shares last week hit the highest since 2008 after Trump said he was mulling a spinoff of the U.S. mortgage finance firms.
"I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump wrote in the post late on Tuesday.
Fannie and Freddie, which operate as for-profit corporations with private shareholders, were created by the U.S. Congress to expand the national home-lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities.
The United States Treasury owns preferred shares in the firms and warrants to purchase about 80% of their common stock.
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