Fannie Mae-No Politics (FNMA)

[kthomp19]

No 80% threshold because shares get sold like in Maiden Lane.

I said the wrong thing in the post you replied to, I meant to say that Treasury can avoid the 80% threshold by structuring the transaction correctly. I believe we agree on this. Treasury got 92% of AIG's common stock without ever having to consolidate the balance sheets, right?

If you read my post correctly, Treasury sets a recovery total in dollars... say $50 B.

I don't see how any part of the post you refer to implies this.

Treasury going for a set dollar amount, rather than trying to maximize the per-share price of the warrants, is terrible for the existing commons. At that point every single party with any influence either won't care what the common share price is, or will want it to be low.

The eventual SPO years later would be based on then-prevailing common share prices, not today's miserable <$2 floor which WOULD create a dilution nightmare.

The thing is, everything Calabria has said points to this very dilution nightmare.

7:03, Calabria: "It has always been my view that an exit from conservatorship is going to require a large capital raise by Fannie and Freddie."
CNBC interview from April 1

8:13, Calabria: "The shareholders will be heavily diluted when we raise capital."
Bloomberg interview from February 25

I don't see how a years-away SPO/re-IPO comports with this. Calabria doesn't want to wait that long, that much is obvious.