Fannie, Freddie delist

City A.M. Reporter
FANNIE MAE and Freddie Mac, the largest US home funding companies, will delist their shares on the New York Stock Exchange after Fannie Mae fell below and Freddie Mac held near minimum price requirements, the companies’ regulator said yesterday.

The companies, each taken under government control in September 2008, said they no longer met NYSE listing standards and that shares would now trade in the over-the-counter market. The regulator, the Federal Housing Finance Agency (FHFA), directed the companies to delist common and preferred stock from the NYSE and any other national securities exchange. It said the delisting order was not taken due to the companies’ performance.

Stock exchange requirements for maintaining price levels and curing deficiencies were the driving force for moving to delist, he said.

Common shares of each company have hovered near the NYSE required minimum average closing price of $1 for most months since the conservatorships began in September 2008.

Fannie Mae’s closing stock price has recently been below the required average price, which would mean either delisting or a “cure” to restore the price. Curing would not assure maintaining the minimum or avoiding loss of shareholder value, according to the regulator. Freddie Mac’s shares had been holding just above the minimum.

“A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets,” said FHFA acting director Edward DeMarco.