Fannie Mae-No Politics (FNMA)

[Rodney5]

Highlighting a few sentences

PROBLEM: Self-dealing FHFA appointed CEOs

WRITTEN AS CLEAR A DAY, Optional Pay Down of Liquidation Preference.

Quote: “Company may pay down the Liquidation Preference of all outstanding shares of the Senior Preferred Stock pro rata, at any time, in whole or in part,” End of Quote

NOTE: WHOLE OR IN PART

Quote: “Prior to termination of the Commitment, and subject to any limitations which may be imposed by law and the provisions below, the Company may pay down the Liquidation Preference of all outstanding shares of the Senior Preferred Stock pro rata, at any time, out of funds legally available therefor,” End of Quote

NOTE: PRIOR TO TERMINATION.
PRIOR PRO RATA, AT ANY TIME!

COMPANY MAY PAY DOWN THE LIQUIDATATION PREFERENCE OF ALL SHARES OF SPS.

Quote: “In the event the Company shall pay down of the Liquidation Preference of the Senior Preferred Stock as aforesaid, notice of such pay down shall be given by the Company by first class mail, postage prepaid, mailed neither less than 10 nor more than 45 days preceding the date fixed for the payment, to each holder of record of the shares of the Senior Preferred Stock, at such holder’s address as the same appears in the books and records of the Company. Each such notice shall state the amount by which the Liquidation Preference of each share shall be reduced and the pay down date.” End of Quote

AS PLAIN A DAY!

The problem is not that the Treasury Swept the Net Worth of the companies. THE PROBLEM: The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the terms of the Pay Down of the Liquidation Preference applied.


According to the 'Contract' the companies did not need Treasury's permission to pay down the LP.

The money swept by the Treasury apply it to LP and the 10% over payment returned to the companies the LP would be paid in full and the SPS would be redeemed and the SAME DAY IN TIME the companies could turn to the Market with a secondary IPO replacing the commitment.

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