Fannie Mae-No Politics (FNMA)

[contrarian bull]

AIG.WS warrants - How did that happen? What were the terms?

They gave them to me in January, 2011 - 10 year life, $45 strike price. I'm told they have a cost basis for me of $12 each. They are currently worth about $21, but were out of the money for a long time.

They were considered a dividend to me as a shareholder. I got 0.533933 warrants for every share of AIG I had.

I don't know why they gave them out, but it was part of the "recap and release" for AIG somehow. I'll have to investigate that further unless someone here remembers the details of the AIG bailout. I had bought AIG prior to the bailout - of course bought more when it was way down. In 2009 AIG did a 1 for 20 reverse split.

I was hoping F&F would have a similar fate to AIG, but then things went wonky as we all know.

Here is some info about them from AIG web site at http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-newsArticle&ID=1513963:

The Warrants are being issued as part of a series of integrated transactions to recapitalize AIG initially announced on September 30, 2010. The U.S. Department of the Treasury will not receive Warrants in this distribution.

"This marks continued progress for AIG towards completing the recapitalization and furthering our work to repay the U.S. taxpayer," said Robert H. Benmosche, AIG President and Chief Executive Officer. "We are working diligently to complete this plan in the coming weeks."

Condition to Issuance. The issuance of the Warrants as a dividend is subject to the condition that the parties to the recapitalization (i.e., AIG, the U.S. Department of the Treasury, the Federal Reserve Bank of New York, and the AIG Credit Facility Trust) each determines as of the close of business on January 12, 2011, that it expects (assuming there is no material change in the relevant facts, circumstances, and conditions on or before January 14, 2011) that the recapitalization will close on January 14, 2011. AIG will issue a press release on January 12, 2011, announcing whether or not this condition has been satisfied. If this condition is not satisfied, AIG will not issue the Warrants, and holders of AIG common stock will have no right to receive the Warrants. There can be no assurance that this condition will be satisfied.

Terms of the Warrants. If the above condition is satisfied, AIG common shareholders will be issued 0.533933 Warrants for every share of AIG common stock owned on the record date. Each Warrant will entitle the holder to purchase one share of AIG's common stock at an exercise price of $45 per share, subject to anti-dilution adjustment for certain events. The Warrants will be exercisable through January 19, 2021, which is ten years from the date of issuance.