Fannie Mae and Freddie Mac have renewed their commitments to issue subordinated debt under separate agreements with their supervisor, the Office of Federal Housing Enterprise Oversight."The corporations shall take reasonable steps to maintain outstanding subordinated debt of sufficient size to promote liquidity and reliable market quotes," according to the agreements by the chief executives of the two government-sponsored enterprises. In 2000, the GSEs made voluntary commitments to Congress to issue sub debt. But Fannie and Freddie suspended their sub debt programs when they ran into accounting problems. "These agreements represent an evolution of voluntary actions to a set of enforceable commitments that will be overseen by OFHEO and will operate within a predictable supervisory framework," said OFHEO acting director Stephen Blumenthal. "We anticipate we will be able to resume issuing when we become current in our financial reporting" in the first quarter of 2006, a Freddie spokesman said. Freddie issued $5.5 billion sub debt in 2001 and 2002 before suspending issuance. Fannie officials declined to comment on when they will resume issuance. The GSE issued $12.5 billion in subordinated debt before suspending its program in November 2004.

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