Fannie Mae (FNMA)

[Rodney5]

Using a conservative calculated figure of a Market Cap for Fannie Mae's common stock at $230 billion the money due the JPS at par is small in comparison. The JPS are listed on the books at $19.1 billion, this calculates at 8.3 percent of the value of the common stock. The JPS are not due any amount of accumulated backward dividends, every issue of JPS are Non Cumulative. Many, not all, JPS holders think the whole company revolves around them only; and for some unexplained reason the same few want to see the common shareholders wiped out.

At this space in time only three equity owners have right to the intrinsic value of Fannie Mae which are Treasury, JPS Holders and Common Shareholders. Treasury has received $301 billion from both Fannie and Freddie. The Fannie Mae JPS are due $19.1 billion, and the Common Shares Holders own the company.

Can this be settled where all three owners are satisfied?

Mr Howard, Quote: “First, Treasury and FHFA must agree to cancel the net worth sweep, and eliminate Treasury’s liquidation preference. Fannie and Freddie already have repaid their senior preferred stock, with 10 percent interest. And Treasury should not require that the companies’ senior preferred be converted to common. To do so would be to require them to repay their indebtedness to Treasury twice, which is unjustifiable, and blatantly unfair. Without the senior preferred, Fannie and Freddie’s combined March 31, 2022 capital shortfall of $441 billion would be cut to $248 billion, or by 44 percent.' End of Quote. From “A Capital Reality Check” May 23, 2022

The FHFA and Treasury will have to rip up the Terms of the Agreement to convert the Senior Preferred to Common.

FOURTH AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF TERMS OF VARIABLE LIQUIDATION PREFERENCE SENIOR PREFERRED STOCK, SERIES 2008-2

FACT: The Senior Preferred Stock cannot be converted to common stock.
No 6 and No 7

Quote “No Conversion or Exchange Rights

The holders of shares of the Senior Preferred Stock shall not have any right to convert such shares into or exchange such shares for any other class or series of stock or obligations of the Company.

No Preemptive Rights

No holder of the Senior Preferred Stock shall as such holder have any preemptive right to purchase or subscribe for any other shares, rights, options or other securities of any class of the Company which at any time may be sold or offered for sale by the Company.” End of Quote

https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-Fourth-Amended-Restated-Certificate-04-13-21.pdf