Fannie Mae-No Politics (FNMA)

[FOFreddie]

Hi Kthomp,

I wondered if you noticed the wording on the top of page 103 of the proposed regs - .. ^For example , a tailored exception (referencing dividend restrictions) to allow for some distributions on an Enterprise's newly issue preferred stock migh increase investor demand for the offerings of those share...* They definitely are differentiating here with the word " newly*. Probably means they will refinance JPS or convert?

Also Table 8 on Page 101 is interesting. Looks like payouts will be prorated and not eliminated until the capital buffer gets below 25% of required levels - do you think this takes the zero coupon JPS scenario off the table?

Did you see the Compliance Period provisions on Page 249. The dividend restrictions would kick in the later of one year from the publication of the final rules or the termination of conservatorship. Do you think this also takes the no dividend to common and zero coupon JPS scenarios off the table?