World Business

Freddie Mac, Fannie Mae move to OTC market

(Agencies)
Updated: 2010-07-09 15:22

Photo taken on July 8, 2010 shows the logo of Freddie Mac outside its headquarters in Mclean, Virginia, the United States. Shares of the company's common stock and the 20 classes of its preferred stock that previously were listed and traded on the New York Stock Exchange (NYSE) began trading exclusively on the over-the-counter (OTC) market on Thursday.[Xinhua]

McLEAN, Va: Shares of Fannie Mae and Freddie Mac will begin trading over-the-counter Thursday, nearly a month after the government-sponsored mortgage buyers said they could no longer meet the requirements of companies listed on the New York Stock Exchange.

Freddie Mac's common stock, now unlisted, will trade under the symbol "FMCC." Investors will be able to trade Freddie Mac's 20 classes of preferred stock.

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Fannie Mae's common stock will trade under the symbol "FNMA." Its preferred shares also will be listed.

Last month, the companies' regulator, the Federal Housing Finance Agency, said that Fannie's shares have been below the $1 average price level for 30 trading days. NYSE rules require a company to take action to boost its shares or delist. Freddie's shares have hovered close to the $1 mark.

Fannie and Freddie were created by Congress to buy mortgages from lenders and package them into bonds that are resold to investors. Together they own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

During the housing boom, the two loosened lending standards for borrowers and were broadsided when the housing market crumbled.

The government took over the two companies in September 2008 after they suffered huge loan losses.

In 2007, shares of both companies traded above $60. As the housing crisis deepened the stocks lost almost all of their value, plummeting below $1 by September 2008.

During the last day on the NYSE Wednesday, shares in Freddie Mac closed down 5 percent at 34 cents, then tumbled another 5 percent in after-hours trading.

Shares in Fannie Mae slid 17 percent to close below a quarter each.