Wednesday, July 06, 2022 5:33:53 PM
The capital raise needed is a bit higher than that. The capital rule says that the base minimum (leverage) capital requirement is 2.5% of adjusted total assets, which is higher than balance sheet assets.
Fannie's adjustment is around 6% and Freddie's is 16% according to their Q1 2022 10-Q forms, though I don't know how those adjustments were calculated.
Weighted by balance sheet size, that makes FnF's base 2.5% capital requirement about 9.3% higher than the one you calculated, meaning FnF would have to raise $104B or so once you include Q2 earnings. FnF's balance sheets themselves will have gone up by 2-3% or so during Q2, meaning the capital raise size would be more like $106B.
That's consistent with my calculation at the end of Q1 that FnF would have to raise $109B combined to reach the 2.5% capital requirement. That number going down by $3B in a quarter (reduced by earnings and increased by balance sheet expansion) is about right.
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