Fannie Mae-No Politics (FNMA)

[Rodney5]

no name nonsense Quote: “ The only real question is what kind of haircut the JPS are willing to take.” End of Quote

Willing to take??

Somehow the JPS will be miraculously saved, but the common shareholders are wiped out into oblivion. Seems this is the conversation repeated every day.

What makes the JPS so sure the Treasury will not demand payment in full on the Liquidation Preference wiping out both JPS / Common in receivership?

The Treasury’s LP continues to grow the regulator is authorized or required to place the companies into receivership under specified conditions, which would result in our liquidation. Money received by the Treasury pays off the LP by confiscation of our companies. Leaving nothing for JPS or Common.

As we speak the value of the LP is greater than the entire business operation of Fannie and Freddie.

Company’s Financial Statement
Risk Factors Summary
GSE and Conservatorship Risk

Quote: "Our business activities are significantly affected by the senior preferred stock purchase agreement. Our regulator is authorized or required to place us into receivership under specified conditions, which would result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common shareholders." End of Quote Page 33

Link: https://www.fanniemae.com/media/46276/display

"In the event the assets legally available for distribution to stockholders are insufficient to pay the liquidation preference of all Preferred Stock in full, the assets available for distribution will be divided among all holders of Preferred Stock on a pro rata basis, based on the value of the liquidation preference of each series of Preferred Stock." Page 5

Link: https://www.sec.gov/Archives/edgar/data/310522/000031052220000121/descriptionofsecuritie.htm