Fannie Mae (FNMA)

[rekcusdo]

No, the preferreds are not safe.

Usually, preferreds are safer because they are higher in the "pay-off" if anything goes wrong. They also usually have better terms in the company charter.

In the case of the GSEs, however, the preferreds have practically the same level of risk as the commons. The ONLY way that the junior preferreds would benefit over commons is if the companies wind up, meaning they no longer exist, and the money acquired from selling off all the assets is enough to pay off all of the debts and senior preferred share liability.

HIGHLY unlikely situation.