Fannie Mae-No Politics (FNMA)

[imtheshadow]

NORC, thanks ... relevant part:

The junior preferred stock should be exchanged for common stock on a basis that is viewed as fair, based on capital markets standards and the prevailing market value of those securities. The U.S. Treasury should exercise its warrants to acquire 79.9% of the common stock of the GSEs, as agreed in the PSPAs. Since the beginning of the conservatorships, Treasury has received dividends totaling over $300 billion on its original capital infusion of $191 billion. Consequently, the liquidation preference of the senior preferred stock should be reduced to zero and the Treasury should be considered “repaid”. These actions are aligned with the interests of the U.S. Government to move forward in recapitalizing the GSEs, namely in eliminated the current significantly negative net worth of Fannie Mae and Freddie Mac and removing claims that negate the value of the very common stock that must be offered to the public to raise capital.