If analysts at Lehman Brothers are right, the pending change to a Financial Accounting Standards Board rule could end up with the two companies having to raise billions of dollars to comply with the change.
As far as the rule itself is concerned, it would require the companies to return off-balance sheet items onto the books again.
Assuming this was to hold, Fannie Mae (NYSE: FNM) would have to raise $46 billion, while Freddie Mac (NYSE: FRE) would have to come up with an additional $29 billion in capital.
Even though they brought up the issue, Lehman Brothers analysts added that the two companies would probably receive an exemption to the rule.
If that were to happen, investors in the two companies would benefit from others having to comply with the rules, while investors in competitors would be at a disadvantage. Talk about conflicts of interest.
Lehman added that the current model might be changed concerning the U.S. guaranteeing the debt of Freddie Mac.
This is a big story if the accounting rules are changed and Freddie Mac and Fannie Mae are given exemptions. There would be enormous pressure to change the model if they are.
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