Fannie Mae-No Politics (FNMA)

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Fannie/Freddie investor deal sooner rather than later - Dick Bove

Dec. 2, 2016 12:17 PM ET|About: Fannie Mae (FNMA)|By: Stephen Alpher, SA News Editor
Corporate tax cuts would produce negative net worths for Fannie Mae (OTCQB:FNMA -6.6%) and Freddie Mac (OTCQB:FMCC -5.9%) as it would reduce the value of their DTAs, says Rafferty Capital's Dick Bove. Thus, incoming Treasury Secretary Steven Mnuchin will need to hammer out a deal with investors prior to any tax bill.

Mnuchin, says Bove, understands the GSEs as well as anyone thanks to his experience turning around IndyMac. "If there's anyone in the U.S. who can do it, it’s the guy who solved IndyMac."

He believes it's possible Mnuchin has already held talks with Trump supporter and Fannie investor John Paulson, and that other prominent investors like Bruce Berkowitz and Bill Ackman would prefer a quick deal vs. spending years and millions in court.

On Jan. 20, all the material Democrats have withheld from the courts becomes available to the Trump administration, says Bove. This gives Mnuchin "staggering leverage" against potential Democratic opposition.

Source: Bloomberg

http://seekingalpha.com/news/3228329-fannie-freddie-investor-deal-sooner-rather-later-dick-bove