Fannie Mae-No Politics (FNMA)

[kthomp19]

I'm curious how the liquidation preference is dealt with in the above scenario. Would treasury get to keep the current $254B in liquidation preference?

Yes, though I thought the number was more like $240B.

Does the dollar-for-dollar increase in liquidation preference effect a taking the same way a cash sweep does?

I'm not sure, but I doubt it. What the liquidation preference ratchet does is remove all future liquidation preference claims from the existing juniors and commons, but the NWS had essentially already done that and the Supreme Court said that's okay.

The anticipatory breach claim is going to trial in front of Judge Lamberth, and it concerns the liquidation preference and dividend rights in the juniors' contracts.