Fannie Mae-No Politics (FNMA)

[kthomp19]

better hope the final plan looks more like moelis than what’s suggested by nomura.

Exactly. Moelis was always over-optimistic in terms of its offering price and future earnings. Nomura's numbers are much more reasonable, and as you correctly point out, they have no horse in the pref versus common race. It's as close to a purely objective analysis as we're going to get.

The idea that FnF will need either only a small capital raise or none at all is just pure nonsense. The government has no desire to allow FnF to operate on razor-thin capital margins (relative to their $5.5T in liabilities) for long enough to recap with only retained earnings, and setting low enough capital standards to allow FnF to meet them quickly without a capital raise flies in the face of everything Calabria has said.