Fannie Mae-No Politics (FNMA)

[Bryndon]

Your post that I responded to said "So, at a minimum, we’re asking the court to order the return of approximately $220.4 billion in cash ($26.9 billion) and write-downs ($193.5 billion).", and the explanation of these numbers started with "If these dividend payments were recharacterized quarterly".

This appears to be inconsistent with your statement in italics above.

There’s no inconsistency, you just simply read too much into my statement. All I did was to quantify a possible takings award – $220.4 billion – using a model that recharacterizes the quarterly dividend payments. The underlying process of actually writing-down the senior preferred stock (with some cash returned) and a credit to the retained earnings accounts would be a matter for the parties to work out, not the USCFC.

But what I’m proposing is really no different than what the Collins plaintiffs are requesting – a 193.5-billion-dollar write-down of the senior preferred stock. They’re just not asking for an additional $26.9 billion, like what I’m proposing.

The only remedy that both unwinds the NWS and conforms to the unchallenged original SPSPAs is for Treasury to return $125B in cash (the amount they received above the 10% dividends) and keep the seniors intact.

Well, no plaintiffs are asking that the senior preferred shares remain intact, so it probably won't end up that way.

Of course, Treasury converting the seniors to commons instead accomplishes the same goal but actually involves return consideration to Treasury, making that route much, much more likely.

You’ve advocated for this before, I’ve heard others encourage it, and even the Collins plaintiffs are requesting this form of relief as their second choice. So, maybe you could provide me and others with the steps needed to accomplish a full conversion of 2 million senior preferred shares that have an effective stated value of $96,742/share into common shares. I’m assuming this conversion would be structured such that Treasury would realize (yet again) their current value of $193.5 billion, would that be correct?