Sandler O'Neill Drops Its GSE Coverage

Investment banking firm Sandler O'Neill has dropped coverage of Fannie Mae and Freddie Mac due to what it calls a "realignment" of the companies it covers. Analyst Laura Kaster who last covered the GSEs for Sandler could not be reached for comment. It is uncertain whether the investment banking firm will renew coverage in the future but very well could.

Prior to Ms. Kaster, Sandler analyst Mike McMahon had covered the two GSEs for several years but in 2005 moved onto following only depositories.

Until accounting scandals at Fannie and Freddie, Mr. McMahon had been mostly bullish on the stocks. When Sandler terminated coverage it had a "buy" rating on Fannie and a "hold" on Freddie.

In a final research note on Fannie, Ms. Kaster says, "Longer term, we like the mortgage market and the likely role that Fannie Mae will play in facilitating growth and liquidity in the market."

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