March 31, 2017 / 6:58 PM / 6 months ago

Fannie, Freddie may write down $21 bln due to tax cut -BMO

NEW YORK, March 31 (Reuters) - U.S. mortgage finance giants Fannie Mae and Freddie Mac may write down $21 billion of tax-related assets if there is a deep cut in the federal corporate tax rate as promised by President Donald Trump, according to an analyst at BMO Capital Markets on Friday.

This significant writedown would result in the two agencies, which have been under conservatorship due to heavy losses from the housing market collapse more than eight years ago, to borrow nearly $17 billion from the U.S. Treasury Department, BMO’s head of fixed-income strategy, Margaret Kerins, wrote in a research note. (Reporting by Richard Leong; Editing by Jonathan Oatis)

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