Fannie Mae-No Politics (FNMA)

[obiterdictum]

An IPO or an SPO at $25 billion takes about 9-10 months (Alibaba) just for preparations, and more or less time depending on conditions and circumstances. Then an additional 6-7 months with a lock-up period. How long will it take for a $125-$200 billion SPO, staggered and not staggered?

In my opinion, the Petrobras share offering is a more appropriate parallel for several reasons:

1) Petrobras and FnF both have significant government ownership

Petrobas is a national oil company. The majority of the company is state-owned (~64%) and state-controlled and run.

What % does the US Government own presently of Fannie Mae and Freddie Mac? Will the US Government be operating Fannie Mae and Freddie Mac at and after its secondary public offering?

2) Petrobras's offer was for $70B, much closer to the ballpark that has been thrown around for FnF ($100-150B)

Yes. And process of public offerings in the US is the same. What was the Petrobas timeline for its IPO in the US?

3) This was also a secondary offering, while Alibaba's was an IPO

Do you mean that prior to the 2010 IPO in Brazil and the US, Petrobas sold preferred and common shares on the Brazilian market and then registered these shares for sale on an American exchange as ADRs? Is registering ADRs equivalent to an IPO?

Here is the Petrobas 2010 IPO prospectus: https://www.sec.gov/Archives/edgar/data/1119639/000095012310089286/y86399b2e424b2.htm#129

There is a secondary public offering in the works but there is no amount given and is unrelated to the 2010 IPO. - See: https://www.investidorpetrobras.com.br/enu/14955/Comunicado-Follow%20on-Caixa_Ingles.pdf
https://www.sec.gov/Archives/edgar/data/1119639/000119312519168648/d755163d424b3.htm

My research on Petrobras is admittedly cursory, with much of the information coming from this New York Times piece and this piece by the Guardian. Still, I trust these sources to get the facts correct. Importantly, from the first piece (emphasis added):

Petrobras said in a regulatory filing Thursday, almost a year after it announced plans for the issue, that its board had approved the sale of ordinary shares at 29.65 reais for each of the 2.4 billion ordinary shares sold, and 26.30 reais for each of the 1.87 preferred shares.

We have heard rumors from Paul Muolo's IMF briefs that Treasury has already contacted investment banks (I believe that JP Morgan, Morgan Stanley, Goldman Sachs, and Perella Weinberg were mentioned) in preparation for a capital raise. If this is true then the timeline might have already started.

A speculative possibility and without yet filing a preliminary or completed public offering prospectus with the SEC.

I'm not sure if a ~$100B equity raise for FnF will take appreciably longer than the $70B for Petrobras.

How long did Petrobas take, from start to finish to bring open its IPO in Brazil and the US?

Yet it appears that, based on this parallel, an offering in Q1 2020 is not infeasible.

Based on what data and information?

Also, according to NASDAQ's price history for Petrobras, the stock price had very little movement in the aftermath of the offering. It closed at $35.59 on September 23 2010 (the day before the offering was announced), and fluctuated between $32 and $38 for the next 4 months.

PBR (common) trades today at: $15.56 (+0.49,3.22%) as of 6/11/2019 3:12:04 PM
PBRA (preferred) $14.08 (+0.38, 2.77%) as of 6/11/2019 3:09:17 PM

As near as I can tell, the USD/BRL exchange rate was between 1.70 and 1.72 on the offering date, giving a USD offering price of $50.41-51.00, a 41.7-43.3% premium over the previous day's closing price. Applied to FnF, and using today's common share prices, an equivalent premium would imply an offering price from $4.00-4.20 or so.

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This doesn't make sense to me, though; according to NASDAQ's site the stock price hardly budged after the offering. I don't know why the new buyers would pay a 42% premium; they suffered an immediate and considerable capital loss. I will keep researching to try and square this circle.

One more parallel is that the Guardian piece says:

Analysts have said Petrobras will still need to raise more than $50bn through additional stock offerings or loans to meet its goals.

Calabria also said that he has doubts that FnF can raise all the capital needed in one offering. This could make a ~$70B FnF offering even more plausible, in my opinion.

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