Fairholme Capital Management:

• Fairholme Capital Management announces proposal for purchase of insurance businesses from Fannie Mae and Freddie Mac
• Fairholme Capital Management says companies would be capitalized with about $34.6 billion in exchange for preferred stock in the entities
• Fairholme Capital Management - cos would be capitalized with at least $17.3 billion of new capital raised from preferred stockholders in rights offering
• Fairholme Capital Management - proposal allows for liquidation of Fannie and Freddie, ending their federal charters and special status
• Fairholme Capital Management - centerpiece of proposal is establishment of 2 new, state-regulated private insurance companies
• Fairholme Capital Management - new companies would have no federal charter or special status, and the names "Fannie" and "Freddie" would be retired
• Fairholme Capital Management - new companies would earn profits only from new business written by state-chartered insurers after the cut-off date
• Fairholme-capital from conversion of preferred stock of Fannie, Freddie, with attributable profits, would be retained by new cos as locked-in capital
• Fairholme capital - proposal brings about $52 billion of private capital tosupport credit risk on more than $1 trillion of new mortgages