The Federal Housing Finance Agency, led by Director Bill Pulte, is examining strategies to take Fannie Mae and Freddie Mac public while they remain in government conservatorship. During interviews, Pulte indicated interest in leveraging these entities as public assets. However, the JPMorgan analysts expressed skepticism about the viability of attracting private investment with a dominant government role. They suggested a gradual reduction of the government's stake as a more effective strategy that might allow substantial cash generation for debt reduction.
In a Fox Business interview, Pulte said, 'Maybe there's a way to take these companies public and use these companies for what they are, which are assets for the American people.'
The analysts noted one potential option could be for the government to first convert its senior preferred stock to common equity, exercise its warrants and gradually sell off its majority stake in the private market over time.
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