p - NOVEMBER 5 2009 Buffett Joins Goldman in Bid for Fannie...

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NOVEMBER 5, 2009 Buffett Joins Goldman in Bid for Fannie Mae Tax Credits By SUSANNE CRAIG, CHRISTINA S.N. LEWIS and DAMIAN PALETTA Warren Buffett's Berkshire Hathaway Inc. has joined Goldman Sachs Group Inc. in the investment bank's bid to buy $3 billion in tax credits from government-owned mortgage giant Fannie Mae, according to people familiar with the matter. The involvement of Mr. Buffett adds a twist to what was already a politically sensitive deal. The Treasury Department is considering blocking any potential sale on the grounds that it wouldn't benefit taxpayers; the money Fannie Mae would earn would be offset by the fall in the government's tax income. Fannie Mae and Freddie Mac were seized by the government last year and the Treasury Department has invested close to $100 billion in the housing-finance giants. Almost all their business decisions are vetted by government officials. What would have been simple deal a couple of years ago is now fraught with political calculations, such as the perception of aiding a Wall Street giant at a time of populist anger against bankers. The credits are virtually worthless to Fannie Mae and require the company to take losses each quarter as their value declines. Companies such as Berkshire Hathaway and Goldman Sachs could use them to offset federal tax expenses. A Berkshire Hathaway spokeswoman didn't have an immediate comment. Goldman
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This note was uploaded on 02/17/2012 for the course FINA 463 taught by Professor Tsyplakov during the Spring '10 term at South Carolina.

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p - NOVEMBER 5 2009 Buffett Joins Goldman in Bid for Fannie...

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