Fannie Mae (FNMA)

[MannSinger]

Recap=(NWS+divi hold)-(Senior pref+10%)=$30B-$50B by March 2018

At the end of Q4 2017, GSE will generate more profit than normal because of DTA.

Donot expect corporate tax lower than 25% in 2018. So 10% hit on DTA in 2018 will be overcome by more business due to 3R.

Even if Gov exercise half of warrants, that will go toward future fee of 1% on $200B LOC and any future draw.

Gov has two options for recap -

1. Raise $100B from Buffett and others with 1 to 4 dilution
or
2. Raise $100B by exercising warrants and put that money in escrow account for LOC fee or future draw.