Guido.....thanks very much.
My take on pertinent and pointed statements made by Calabria.
1) "It is up to the companies to determine how they want to raise capital."
A point has been argued by some here that Calabria is in charge of the capital raise. VERY CLEARLY, he has made the point that he is responsible for the capital standards, and the GSE'S THEMSELVES ARE COMPLETELY RESPONSIBLE FOR RAISING THEIR OWN CAPITAL. There is absolutely no wriggle room here.
2) Calabria goes on to say that as he see currently sees it, the companies can raise their own capital in a variety of ways, including retained earnings, sale of assets, private offerings, and public offerings. And that he sees a public offering taking place in either 2021 or 2022.
Now mind you, this is not his call to make. But I think by him presenting it in that fashion, the door is open for Fannie/Freddie to use ALL of the above to achieve the capital objectives.
After hearing this, I can foresee this taking place, quite possibly, in the following manner
A) Obviously, a continuing buildup of retained earnings through full release of NWS to allow the GSE's to continue to retain their own earnings
B) Perhaps, perhaps some asset sales???
C) A PRIVATE offering that would get the GSE's to the point of a consent decree. I can foresee one or more of the large financial institutions wanting to get in on the ground floor at baseline prices here. They would assume the most initial risk, but also capitalize on the effects of conservatorship release with consent decree/allowance of GSE's to run their own companines again.
D) And finally, public offering (or 2) in 2021/2022, at higher prices (due to reduced risk) to get them to the final point of reaching full capital standards with final and complete release.
