Fannie Mae-No Politics (FNMA)

[tcj]

Obiterdicum is correct

The US Treasury's reason for receiving a warrant for a potential 79.9% equity stake in each GSE is directly related to prohibiting pushdown accounting from being enacted under US accounting rules.

If the warrants are exercised and the US Treasury comes to own and retain 79.9% of the common stock of the GSEs, the GSEs are not substantially owned by the US Government (US Treasury). Substantially owned, in FASB practices, means 95% or more. Pushdown accounting is allowed, if ownership of the GSEs ranges between 80 and 95 percent. Pushdown accounting is prohibited with a threshold of less than 80 percent ownership. If this accountant standard holds, then the exercise of the warrants does not force pushdown accounting and does not move assets and liabilities to the US account.