Fannie Mae-No Politics (FNMA)

[JOoa0ky]

"Number 4: Mandatory Pay Down of Liquidation Preference Upon Issuance of Capital Stock"

- Mandatory paydown of liquidation preference
- Upon issuance of capital stock

What that is in reference to is the rule of absolute priority which is who gets paid first during restructuring. In other words, the capital stack.

Before FnF can disburse a single $1 of capital to stakeholders, the liquidation preference needs to be paid/settled first.

This means:
- Stock buybacks
- Dividends
- New JPS issuance
- IPO new shares

What it also implies is no exit from conservatorship until LP is settled.