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GSEs hire Morgan Stanley, JPMorgan Chase as financial advisers

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WASHINGTON — The mortgage giants Fannie Mae and Freddie Mac have hired two of the nation's top investment banks to serve as financial advisers as the two government-sponsored enterprises prepare to recapitalize and eventually exit conservatorship.

Fannie has enlisted Morgan Stanley and Freddie has hired JPMorgan Chase to assist the GSEs in developing plans to boost capital, evaluating market impacts and timing and analyzing valuation, Fannie and Freddie announced Monday.

JPMorgan Chase will serve as Freddie Mac's financial adviser. Rival Morgan Stanley will advise Fannie Mae.
JPMorgan Chase will serve as Freddie Mac's financial adviser. Rival Morgan Stanley will advise Fannie Mae.

The Federal Housing Finance Agency’s own financial adviser, the investment bank Houlihan Lokey, will then assist in evaluating those plans with the aim of returning Fannie and Freddie to the private market and facilitate the road map out of government control.

“Today’s announcement marks another important step toward a responsible exit from conservatorship, and we look forward to working with FHFA, Treasury, and Morgan Stanley to chart a strong course forward for Fannie Mae,” Hugh Frater, Fannie's president and CEO, said in a news release.

Fannie said it chose Morgan Stanley as its adviser for the investment bank’s “demonstrable qualifications and expertise in managing such complex matters,” while Freddie said it selected JPMorgan Chase after receiving competitive offers to its request for proposals in May.

“We look forward to working with JPMorgan to continue meeting the milestones necessary to begin our new chapter as soon as possible,” Freddie Mac President and CEO David Brickman said in a news release.

Jamie Dimon, JPMorgan Chase's chairman and CEO, said in the release, "We look forward to working side by side with Freddie Mac on this historic assignment in the months ahead.”

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GSE reform Fannie Mae Freddie Mac JPMorgan Chase Morgan Stanley FHFA Housing finance reform GSEs Capital