Fannie Mae-No Politics (FNMA)

[kthomp19]

Please feel free to take up any issues or disagreement directly with Bank News on guarantees under SPSPA covenants.

Bank News doesn't matter. What I'm challenging is your claim that Treasury backs up the entirety ($5.5T) of FnF's liabilities. That's false, Treasury is only on the hook for around $200B due to the undrawn funds from the SPSPA funding commitment.

Your link also doesn't address the motivation behind the issuance of the warrants at all, therefore it cannot prove your point there. I maintain that your reasoning for the warrants' existence is invalid because your reasons only apply to FnF, while Treasury got 79.9% warrants in other companies as well.

I also noted the comment that taxpayers never paid a dime for the SPS. Nothing paid in = no equity status, just an obligation due by the GSEs.

Wrong. Treasury paid $1B for the initial seniors, and then the seniors' liquidation preference (which is reflected on the balance sheet) went up $1 for every $1 they sent to FnF when the companies drew money between 2008 and 2012 (and in Q1 2018). Treasury has paid in $187B to FnF.

If the Treasury makes payments under its funding commitment, the liquidation preference of the Treasury shares will increase accordingly.

The seniors are in the equity portion of the balance sheet. FnF drew a total of $187B from Treasury over time, it is accounted for in FHFA's draw tables, and it represents the total amount of equity Treasury owns in FnF. Again, look at the balance sheets.