Fannie Mae-No Politics (FNMA)

[kthomp19]

You might find these quotes to help in reinforcing the point.

Page A-3 of the FNMAS circular (emphasis added):

No dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, the common stock of Fannie Mae or any other stock of Fannie Mae ranking, as to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of Fannie Mae, junior to the Series S Preferred Stock) may be declared or paid or set apart for payment on Fannie Mae’s common stock (or on any other stock of Fannie Mae ranking, as to the payment of dividends, junior to the Series S Preferred Stock) unless dividends have been declared and paid or set apart (or ordered to be set apart) on the Series S Preferred Stock for the then-current quarterly Dividend Period

Short version: FNMAS must receive full dividends before the commons can receive any dividends at all.

This is in direct contrast to the utter falsehood I saw stating that new investors in FnF commons could be paid a dividend while not paying dividends on the juniors.

Section (e) on page A-4 also shows that no junior pref series can be paid dividends unless all of them are, and on a pro rata basis if it's a partial dividend:

No full dividends shall be declared or paid or set apart for payment on any stock of Fannie Mae ranking, as to the payment of dividends, on a parity with the Series S Preferred Stock for any period unless full dividends have been declared and paid or set apart for payment on the Series S Preferred Stock for the then-current quarterly Dividend Period.

Not that you didn't already know all this, of course. But we're dealing with the deliberate misunderstanding of contracts that can only be described as willful ignorance, from much the same sources as the idea that the "No Conversion" clause in the junior prefs' contracts means that they can't be offered a conversion later (which is, of course, completely false).