Fannie Mae-No Politics (FNMA)

[Patswil]

R&R: A Commonsense Approach to Recapitalizing and Releasing
Fannie Mae and Freddie Mac--Bryndon D. Fisher
February 23, 2023

The Second Step – What Our Companies Can Do
With the regulatory parameters set by the FHFA, here’s what the two companies can do to

complete the process of rebuilding their capital and restoring themselves as the shareholder-
owned, mortgage-finance powerhouses Americans, of all walks of life, have come to depend

on and trust:
1) Relist the common shares of Fannie and Freddie on the New York Stock Exchange (the
“NYSE”).
2) Redeem the entire balance of each company’s outstanding non-cumulative preferred
stock at full par value, and issue new non-cumulative 3.75-percent preferred shares in
approximately the same amount on the NYSE. For purposes of this analysis, the
financial statements will be unaffected by these redemption and issuance processes.
3) Issue additional common stock for each company (70 million shares for Fannie at
$113.00/share, and 195 million shares for Freddie at $102.00/share), raising core
capital by $27.8 billion.
4) Reissue the entire balance of treasury stock in each company (151 million shares for
Fannie at $113.00/share, and 76 million shares for Freddie at $102.00/share),
eliminating the negative treasury stock balance of $11.3 billion and increasing core
capital by a total of $24.8 billion.
With the issuance of more common shares and the reissuance of each company’s treasury
stock, Fannie Mae and Freddie Mac will have exceeded their statutory minimum capital
requirements by $1.8 billion as of December 31, 2023; they would, thus, be free to finally and
completely exit their respective conservatorships, and
5) Resume the preferred and common stock dividends beginning the first quarter of fiscal
2024.

https://drive.google.com/file/d/1LNWzb9QhI1GiOk8W_2MYgERyE4yNRU04/view?pli=1