Fannie Mae-No Politics (FNMA)

[Rodney5]

This “Separate Account plan” kindly, explain to us how this will unfold. And when will this take place?

You calculate “An adjusted $402B core capital shortfall as of end of 2023.” What I understand from your perspective is the shortfall is by reason of the outstanding Senior Preferred Stock with the Liquidation Preference. Are you saying the SPS LP will be cancelled?

My understanding is Fannie Mae had a GAAP positive net worth of $78 billion at YE23, the Enterprise Regulatory Capital Framework excludes the stated value of the senior preferred stock ($120.8 billion), as well as a portion of deferred tax assets, resulting in the Company being significantly undercapitalized. Indeed, at YE23, the shortfall to adjusted capital requirements totaled $243 billion, with the Company reporting negative regulatory capital ratios given deficit for each tier of capital. Given covenants under the PA, Fannie Mae also does not have access to equity funding except through draws from the U.S. Treasury (and only when total liabilities exceed total assets).