Fannie and Freddie To Be Delisted From Stock Exchanges

Fannie Mae and Freddie Mac said they intend to delist their stock from the Stock Exchange as the continue to struggle through billions in losses.

The Federal Housing Finance Agency, the companies' conservator, said it directed them to delist their stock because of stock-exchange requirements for maintaining price levels above $1 per share.

"FHFA's determination to direct each company to delist does not constitute any reflection on either enterprise's current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator," said Acting Director Edward J. DeMarco.

After the delisting, the two stock of the companies will be traded in the over-the-counter market. Freddie said it expects the delisting of its common stock and the 20 listed classes of its preferred stock from the NYSE will happen on or about July 8. Fannie will delist from the NYSE and the Chicago Stock Exchange.

The crash in the U.S. housing market has pounded Fannie Mae and Freddie Mac with heavy losses on mortgage debt since 2007. Fannie 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.

Shares of Fannie and Freddie closed at 92 cents and $1.22, respectively, on Tuesday. The stocks are down 22% and 17% so far this year.

The two mortgage giants have struggled heavily amid the housing market's woes. Fannie in May said its first-quarter loss narrowed on fewer write-downs and credit-loss provisions as it requested another $8.5 billion in aid from the federal government. Meanwhile, Freddie posted a narrower first-quarter loss and said it would need a $10.6 billion injection from the Treasury--its first request for aid in four quarters.

The U.S. government established Fannie Mae in 1938 to make mortgages more available to low income families. In 1979, the government created Freddie Mac, to expand the market for mortgages in the country.

Both firms were put into government conservatorship in August 2008, after the housing market collapsed, triggering the worst financial crisis since the Great Depression.