Report: Treasury readies rescue plan for Fannie, Freddie
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The U.S. Treasury is close to announcing a plan to bolster the finances of mortgage titans Fannie Mae and Freddie Mac, the Wall Street Journal reports on its website this afternoon.
The brief story doesn’t give any specifics, but says the plan could be announced this weekend.
From the Journal:
The plan is expected to involve a creative use of Treasury’s new authority to make a capital injection into the beleaguered giants. The plan includes changes to senior management at both companies, according to a person familiar with the plans.
No word on whether the companies’ common shareholders would be wiped out. But Treasury Secretary Henry M. Paulson Jr. has previously said his goal was to maintain the companies as shareholder-owned businesses.
Some investors don’t believe it: Fannie Mae shares jumped 62 cents to $7.04 in regular trading, but have plunged to $4.59 in after-hours on the Journal report. Freddie Mac shares rose 15 cents to $5.10 in regular trading but have tumbled to $3.51 after-hours.