Fannie Mae-No Politics (FNMA)

[Patswil]

Raising capital could be done a few ways. The first would be through a common stock offering. This may be purely private or the government may opt to contribute capital by purchasing common shares. Currently, the Treasury has warrants for 79.9% of Fannie's common stock, however, the strike price is so low that exercising these warrants alone would have little impact on capital levels.

In this event, Fannie should be able to acquire adequate capital levels to enable restoring preferred dividends fairly quickly. Whether or not Fannie does so would be uncertain, but a common share offering would clear the way for bringing back preferred dividends.


http://seekingalpha.com/article/3306235-fannie-mae-preferred-when-will-the-dividends-return?auth_param=qicp:1aplvij:86d73fc801c55328569a46fdd0ea2038