Fannie Mae-No Politics (FNMA)

[bathbombs]

Can you or anyone else answer the following questions I have?

Treasury will permit up to $70 billion in proceeds of stock issuances by each GSE to be used to build capital.

1. Does an equity raise also increase the liquidation preference?

Upon the capital reserve end date, the GSEs will resume quarterly dividend payments. The dividend amount at that time will be equal to the lesser of 10% of the liquidation preference of Treasury’s senior preferred stock, or the incremental increase in the GSE’s net worth in the prior quarter.

2. The liquidation preference now sits at 228B - I'm interpreting this meaning once we hit 198B in capital reserves, we begin to pay the 10% dividend, however that amounts to 22.8B (And will only increase). 22.8B is more than what the GSE's make annually, so upon capital reserve end date, this equates to a NWS correct?

3. If the warrants are exercised, does this make the 10% dividend and liquidation preference null?

4. If the answer is yes, I wonder if we see an exercise of the warrants, sooner than expected.