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GSEs Hire Investment Banks to Advise on Exiting Conservatorship
The GSEs announced separately on Monday that they had hired major investment banks as financial advisors on recapitalization and ending conservatorship. Fannie Mae will work with Morgan Stanley, while Freddie Mac is being advised by JPMorgan.
For both GSEs, the financial advisors’ tasks will include advice and assistance on valuation analysis, consideration of potential capital structures and assessment of capital raising alternatives. The investment banks will work with the Federal Housing Finance Agency (FHFA) and the U.S. Treasury along with Fannie and Freddie.
Both Fannie CEO Hugh Frater and Freddie CEO David Brickman said hiring financial advisors represented an important step toward exiting conservatorship. Frater said, “As we continue to stand behind our partners and support homeowners and renters through today’s challenges, we remain focused on ensuring our company is best prepared to serve the market’s future needs.”
FHFA hired its own financial advisor, Houlihan Lokey, in February, MarketWatch reported.
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