Fannie Mae-No Politics (FNMA)

[Rodney5]

Transfer of Ownership Cram-Down

Explained,

Legacy Shareholders means, collectively, each person that owns common stock of the Company immediately prior to the closing of the Transaction (cram-down) which in no event shall include any of the Investors; or very few will remain afterwards maybe 1% or less.

A cram-down deal refers to a situation where an investor or creditor is forced into accepting undesirable terms in a transaction or bankruptcy proceedings.

In the case with Fannie Mae the Treasury's holding of senor preferred stock in the amount of $120.8 billion, with a liquidation preference of $185.5 billion.

If the Treasury converts this amount of SPS into common stock the Treasury in essence will own 99.9% of all the common stock outstanding. The number of shares outstanding depends on price per share at the time converted. The amount of shares outstanding after the cram-down does not matter at all, it's the percent ownership, a transfer of ownership from the legacy common shareholders to the Treasury. This transaction will cause the legacy common stock to vanish along with any short positions, naked short positions as well as any counterfeit common stock outstanding. Afterwards, the Treasury can do a reverse split reducing the amount in number of the new common stock outstanding.