Fannie Mae-No Politics (FNMA)

[kthomp19]

You say the SPS are equity. Are you sure?

They are in the equity section of the balance sheet. They have a dividend rate, not an interest rate. What else would they be than equity?

If anything the SPS are more like obligations

Semantics. They are still equity, no matter what else you call them.

Afterall, if the Companies are obligated to pay back the LP that has been accumulating since day one, how can you consider them to be equity?

That repayment obligation only triggers if and when FnF are actually liquidated.

Isnt equity the residual ownership after all debts are paid off?

It's the residual value on the balance sheet after liabilities are subtracted from assets. That doesn't require actual repayment of the debts.

The SPS LP is a debt that is owed to Treasury.

Only upon liquidation.

So what equity do the SPS have in GSEs of a negative net worth of a couple hundred billion?

FnF's net worth is not negative at all. It is positive.