Fannie Mae-No Politics (FNMA)

[FOFreddie]

Thanks for the cite Glenn - a couple of interesting points (1) the UST does not think the SPS is worth its PAR value since it has already taken a $ 64 bn haircut and (2) the UST acknowledges that the SPS was intended to be written down to zero:

Here is the cite regarding the intended write down of the SPS:

The capital reserve amount was initially set at
$3.0 billion for calendar year 2013 and, upon nearing its scheduled decline to zero, was reset at $3.0 billion in calendar year
2017. On September 27, 2019, Treasury and FHFA amended the SPSPAs to increase the capital reserve amounts of Fannie
Mae and Freddie Mac to $25.0 billion and $20.0 billion, respectively. In exchange, Treasury’s liquidation preference in each
GSE was scheduled to gradually increase up to the adjusted capital reserve amounts based on the quarterly earnings of each
GSE.

There was no consideration for the change in the accounting and the UST already acknowledges that the Fair Value of the SPS is overstated on the GSE financial statements. Not sure why the SEC filings do not conform with the UST budget financials?