A redemption offer of par ($25/50)? Which btw, I believe WILL occur to the FNMAS issue either on or b4 the call date of December 31, 2025.
Redeeming FNMAS at the end of this year would be something that they should seriously consider. It may have other consequences such as in regards to the lawsuits, but the overall benefits could be compelling. They may also want to consider redeeming FNMAT while in the neighborhood. The costs would be high - a combined $9B - but it would take only about 6 months of Fannie profit to make this up.
FNMAS is now selling for about 53% of PAR and FNMAT for about 49% of PAR and both would pay over 8% if the dividends are turned on so it may be better for both the Gov's eventual ownership share and the legacy common for them to be taken off the table. It would be the cheapest of the options for dealing with them and are a significant share of the $33B outstanding JPS. At the current share prices, it's certainly not a "winfall" for JPS holders compared to what both the Government and legacy common shareholders are expecting. And would leave a bigger piece of the pie for everyone else when the GSEs begin to pay dividends again.
That being said, there are some negatives - especially taking $9B of cash out of the kitty at a time when its crucial to build up the cash as well as foregoing $9B towards capital if conversion (a net of $18 difference in that regard). And because of that, I believe that conversion is the mostly likely outcome. But redemption of the heavy hitters is certainly something that the powers that be should consider - especially this year.
I regard FNMAS as the "bellweather" stock of the GSEs and a great indicator or whether good or bad things are happening behind the scenes to those insiders in the loop. What does 53% tell you?
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