Bill Miller, the Legg Mason mutual fund manager, was Freddie Mac’s largest shareholder as of July 31, with 12% of the company’s stock.
Others Freddie investors include Capital Research & Management of Los Angeles, with a 10% stake as of June 30, and AllianceBernstein and Pzena Investment Management, both of New York, with 6% and 5%.
Holders of Fannie common shares include AllianceBernstein, with 12% of outstanding shares, and Capital Research and Dodge & Cox, of San Francisco, each with 11%, according to data from LionShares.com.
The government said it will recapitalize Fannie and Freddie over time by making purchases of senior preferred stock. The existing preferred shares will continue to trade, the government said, inflicting losses most notably on the regional banks that hold them.
Treasury said banks should ask their regulators for help if they believe losses on Fannie-Freddie holdings cause their capital to fall below required levels – an admission that the prices of the existing preferred shares are likely to fall even from their already reduced levels.
“The federal banking agencies are assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac,” Paulson said. “The agencies encourage depository institutions to contact their primary federal regulator if they believe that losses…are likely to reduce their regulatory capital below “well capitalized.”
The prospect of a virtual wipeout of existing Fannie and Freddie preferred shares could lead to declines Monday in the shares of regional banks and major insurers that hold the shares. Among the holders of Fannie and Freddie preferred issues are Genworth Financial (GNW, Fortune 500) and MetLife (MET, Fortune 500)
