Fannie Mae to Sell $2 Billion in CMBS
Fannie Mae intends to sell $2 billion in commercial mortgage-backed securities in an effort to reduce its holdings of illiquid assets, National Mortgage News reported May 22. The securities that Fannie plans to offer were issued in 2006 and 2007 and are linked to apartment complexes.
Demand for loan-backed bonds is on the rise, and the value on the debt has gone up by as much as 25 percent since December, National Mortgage News reported.
The Federal Housing Finance Agency directed both Fannie Mae and Freddie Mac to reduce illiquid holdings by at least 5 percent, as the government-sponsored enterprises’ conservator seeks to make them smaller.
Credit Suisse Group AG said that sales of newly issued CMBS are climbing and are expected to increase by more than 50 percent this year to a total of $70 billion. Bloomberg reported that Fannie’s offering coincides with another $1.2 billion CMBS transaction from Wells Fargo and Royal Bank of Scotland Group.
Fannie had a record quarterly profit for the first part of 2013, raking in $8.1 billion. The firm will send $59.4 billion to the U.S. Department of the Treasury, bringing total payments to $95 billion, National Mortgage News reported. Fannie has received $117 billion in taxpayer aid since the financial crisis.