May 06, 2008Fannie Mae Announces Plan to Raise Capital
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) announced its plan to raise $6 billion in new capital through public offerings of common stock, non-cumulative mandatory convertible preferred stock, and non-cumulative, non-convertible preferred stock.
Fannie Mae is raising $6 billion in new capital through underwritten public offerings of new securities. The company commences today two offerings totaling $4 billion of common stock and non-cumulative mandatory convertible preferred stock. These offerings will be followed in the very near future by an offering of non-cumulative, non-convertible preferred stock.
Net proceeds of the offerings will be used for general corporate purposes, including to enable the company to maintain a strong, conservative balance sheet, enhance long-term shareholder value, and provide stability to the secondary mortgage market.
All of the common stock is being newly issued by the company. Fannie Mae has granted the underwriters 30-day options to purchase from the company up to an additional 15 percent each of the common stock and non-cumulative mandatory convertible preferred stock.
The common stock and mandatory convertible preferred stock offerings will be managed by Lehman Brothers Inc., and J.P. Morgan Securities Inc., as joint book-running managers. Copies of the preliminary Offering Circulars are available on Fannie Mae's Web site and can be obtained from both underwriters at the following addresses: