Advertisement
FHFA orders Fannie and Freddie stock de-listing from New York Stock Exchange

The Federal Housing Finance Agency (FHFA) has directed the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to de-list their common and preferred stock from the New York Stock Exchange (NYSE) and any other national securities exchange. Once the de-listing is completed, each enterprise’s common and preferred stock is expected to be quoted on the Over–the-Counter Bulletin Board.
"FHFA’s determination to direct each company to delist does not constitute any reflection on either enterprise’s current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator," said FHFA Acting Director Edward J. DeMarco. “The determination to direct de-listing is related to stock exchange requirements for maintaining price levels and curing deficiencies."
Fannie and Freddie's common stock price has hovered near the NYSE minimum average closing price requirement of $1 over 30 trading days for most months since the conservatorships were established in September 2008. Most recently, Fannie Mae’s closing stock price has been below the required $1 average price for the past 30 trading days. Per NYSE rules, a company in that condition must either drop from the exchange or undertake a ‘cure’ to restore the stock price above the $1 mark if it does not meet the NYSE’s minimum price requirements. The alternatives for putting in place such a cure do not assure maintaining the minimum price level or avoiding loss of shareholder value.
In view of Freddie Mac’s share price being close to the $1 mark and the common situation of both companies operating in conservatorship with support from the Treasury Department through the Senior Preferred Stock Purchase Agreements, FHFA has determined that Freddie Mac should also initiate an orderly de-listing process.
“A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets,” said DeMarco.
Each enterprise’s stock will continue to trade, but through a different trading mechanism. The enterprises remain Securities & Exchange Commission (SEC) registrants and are subject to applicable federal securities laws.
For more information, visit www.fhfa.gov.
About the author