Houlihan Lokey named as adviser on U.S. overhaul of Fannie, Freddie
Reuters
Published Feb 03, 2020 05:40PM ET
Houlihan Lokey named as adviser on U.S. overhaul of Fannie, Freddie
By Pete Schroeder
WASHINGTON (Reuters) - The U.S. housing finance regulator has selected investment bank Houlihan Lokey Capital Inc as its financial adviser for a potential overhaul of Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency said in a statement Monday that Houlihan Lokey will advise on how the mortgage finance giants could be rebuilt into fully private companies. The firm will be paid up to $45 million in fees over 5.5 years.
Houlihan Lokey will advise on "business and capital structures, market impacts and timing, and available capital raising alternatives," the FHFA said.
The selection of a financial adviser was seen as a critical step in any effort to return Fannie and Freddie to the private market, after operating under a government conservatorship since being bailed out in 2008. The FHFA's director, Mark Calabria, previously had said he wanted the FHFA to hire an adviser before Fannie and Freddie hired their own to avoid a conflict.
The Trump administration has said it is a priority to recapitalize the pair, which guarantee over half of the nation's mortgages, and remove them from their government lifeline.
Calabria said in a statement that he planned to release a new capital rule for the companies in the "near future."
The regulator will pay Houlihan $9 million for the first year of work, with options to extend the relationship for four and a half more years and up to $45 million more in fees.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.