Fannie Mae-No Politics (FNMA)

[FOFreddie]

Thanks for the reply - just wanted to see where you were coming from.

Perhaps Kthomp wants to chime in but it is my understanding that no investment bank or financial advisory firm has done a restructuring under HERA?

Dont think any state insolvency law or the US Bankruptcy Code would apply to the GSEs while they are in Conservatorship or otherwise because of HERA and their Charters otherwise.

The Lamberth case is looking to Delaware law for the implied covenant of good faith but dont think any restructuring would be governed by Delaware Law while in Conservatorship. Seems like Collins gives this power to the FHFA and the FHFA would have to negotiate with UST?

Looks like the FHFA would have to require the FNMA and FMCC BODs to issue the new shares since there is only 1.308 bn FNMA shares issued and 0.725 bn FMCC shares issued. Not a big deal but not sure if a SEC registration statement would have to be filed with the SEC? Would love to see the Risks Factors and Litigation disclosure for that.

It seems like it would be difficult to get the cramdown done in the next 2.5 years unless they start real soon. Best case seems to be a cramdown as part of a new Housing Reform legislation?

Do you think Toomey and other Republicans would vote for a cramdown of common as part of GSE Reform bill?