Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Kthompt,

In the SPSPA the LP is defined as an “initial commitment fee” based on the amount of Treasury commitment used plus an evolving forms of interest/dividend/capitol distribution (however one wants to define) on top be it 10% or NWS etc. My question to you is as follows. If Treasury converts the Seniors how does it convert a fee to common equity? What do the share certificate terms say? Have the share certificates been revised with each amendment to the SPSPA? Or do the shares just state the terms are based on whatever the current SPSPA is? Or can only the 1billion initially paid to purchase the shares be converted to commons?

Through agreement and amendment. This is not hard. If treasury wants to convert, they will. If FnF want to exit conservatorship anytime soon, the SPS have to be converted.