Fannie Mae Announces Plan to Raise Capital

WASHINGTON, May 6 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM)
announced its plan to raise $6 billion in new capital through public
offerings of common stock, non-cumulative mandatory convertible preferred
stock and non-cumulative, non-convertible preferred stock.

Fannie Mae is raising $6 billion in new capital through underwritten
public offerings of new securities. The company commences today two
offerings totaling $4 billion of common stock and non-cumulative mandatory
convertible preferred stock. These offerings will be followed in the very
near future by an offering of non-cumulative, non-convertible preferred
stock.

Net proceeds of the offerings will be used for general corporate
purposes, including to enable the company to maintain a strong,
conservative balance sheet, enhance long-term shareholder value, and
provide stability to the secondary mortgage market.

All of the common stock is being newly issued by the company. Fannie
Mae has granted the underwriters 30-day options to purchase from the
company up to an additional 15 percent each of the common stock and
non-cumulative mandatory convertible preferred stock.

The common stock and mandatory convertible preferred stock offerings
will be managed by Lehman Brothers Inc., and J.P. Morgan Securities Inc.,
as joint book-running managers. Copies of the preliminary Offering
Circulars are available on Fannie Mae's Web site and can be obtained from
both underwriters at the following addresses:



-- Lehman Brothers Inc., c/o Broadridge, Integrated Distribution Services,
1144 Long Island Avenue, Edgewood, NY 11717; fax 631-254-7140, or
email: qiana.smith@broadridge.com.

-- J.P. Morgan Securities Inc., 4 Chase Metrotech Center, CS Level,
Brooklyn, NY 11245, Attention: Chase Distribution & Support Service
Northeast Statement Processing Phone: (718) 242-8002.
Fannie Mae is a shareholder-owned company with a public mission. We
exist to expand affordable housing and bring global capital to local
communities in order to serve the U.S. housing market. Fannie Mae has a
federal charter and operates in America's secondary mortgage market to
ensure that mortgage bankers and other lenders have enough funds to lend to
home buyers at low rates. In 2008, we mark our 70th year of service to
America's housing market. Our job is to help those who house America.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities of Fannie Mae. Nothing in this
press release constitutes advice on the merits of buying or selling a
particular investment. Any investment decision as to any purchase of
securities referred to herein must be made solely on the basis of
information contained in Fannie Mae's applicable offering documents, and
that no reliance may be placed on the completeness or accuracy of the
information contained in this press release.

You should not deal in securities unless you understand their nature
and the extent of your exposure to risk. You should be satisfied that they
are suitable for you in the light of your circumstances and financial
position. If you are in any doubt you should consult an appropriately
qualified financial advisor.



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Source: Real Estate Newswire

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