President Donald Trump is bringing in bank leaders to meet with him one by one at the White House. Beyond the economic discussion, there's a chance at a big payday for their firms.
Trump is asking for chief executive officers for their pitches on monetizing mortgage giants Fannie Mae and Freddie Mac, including a major public offering of stock, according to people familiar with the matter.
READ MORE:
Last week, Trump invited JPMorgan Chase & Co. CEO Jamie Dimon to meet him at the White House. Goldman Sachs Group Inc. CEO David Solomon is meeting with Trump on Thursday afternoon, and Bank of America Corp. CEO Brian Moynihan is also expected to meet with Trump in coming days. Talks are likely to include other banks as well, the people said.
Officially named the Federal National Mortgage Association and Federal Home Loan Mortgage Corp., the two entities are massive financial organs of the US housing system. The companies have been under government conservatorship since the 2008 financial crisis. Fannie and Freddie have both returned to steady profitability, with earnings being retained.
READ MORE:
Trump said in May that he's giving "very serious consideration to bringing Fannie Mae and Freddie Mac public" after more than a decade of government control.
Hedge funds and other investors have called for the government to release the two entities from conservatorship, which could provide a windfall for shareholders — including the government itself. Analysts have said it could be one of the biggest public offerings ever.
Many complex details would have to be worked out for any such plan, including what stake would initially be offered in any sale, and how investors who hold existing shares — which still trade — would be treated.
READ MORE:
Trump is asking the CEOs to offer their ideas on the strategy for taking the organizations public and how their banks might play a role, the people said, asking not to be identified discussing private information.
A spokesperson for the White House wasn't immediately able to comment. White House Press Secretary Karoline Leavitt, asked earlier Thursday about Trump's meeting with Solomon, declined to detail the purpose. "I won't discuss the president's private meetings from this podium," she said.
