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Saturday, February 06, 2016 3:51:11 PM
You have to be very careful about payment on divvies for non-cume preferred stocks because the rules for their payment or non-payment are governed by the context presented in their prospectus. If a preferred share is sold to the general public as basically an alternative financing conveyance to bonds or secured bank financing... such as to provide liquidity for operations, which is my recollection for FNMAS... the issuer (in this case, Fannie Mae) is obligated to declare a dividend as long as operations generate sufficient profit to pay it, subject to force majeure limitations, such as a government-declared conservatorship.
If the scenario was/is that insolvency would arise by failure to recapitalize, this might be considered a triggering event to justified sustained non-payment of divvies.
JMHO.
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