Fannie Mae May Need Moreby Tim Manni
Fannie Mae may need more than the $100 billion in funding pledged by the U.S. Treasury to stay afloat after reporting a record $29 billion loss and confronting more difficulty in issuing and refinancing debt.
“This commitment may not be sufficient to keep us in solvent condition or from being placed into receivership,” if there are further “substantial” losses or if the company is unable to sell unsecured debt, Washington-based Fannie said in a filing today with the U.S. Securities and Exchange Commission.
Fannie is having difficulty persuading investors to buy its debt instruments, particularly those which mature in more than a year. In addition, their arrangement with the Treasury limits how much total debt they can incur, and they’re getting close to the limit.