The proposed plan focuses on restructuring the capital framework of U.S. government-sponsored enterprises (GSEs) by acknowledging past payments and a sense of government ownership. It suggests the repayment of preferred shares to the Treasury, following significant dividend contributions from GSEs. The proposal also supports retaining the Preferred Stock Purchase Agreements (PSPAs) for additional credit support in exchange for a fee. Moreover, it outlines plans for future public offerings, with Fannie Mae and Freddie Mac aiming for IPOs in 2026 and 2027, respectively, to enhance their capital positions.
According to the plan, the U.S. Treasury would retain the warrants for 79.9% of common stock, while junior preferred shares would either remain outstanding or be converted to common stock on a negotiated basis.
The plan maintains the Preferred Stock Purchase Agreements (PSPAs), which provides incremental credit support to the GSEs, amounting to explicit government support.
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