Fannie Mae-No Politics (FNMA)

[FOFreddie]

Great Observation DaJester - he also said it would be a traditional offering specifically mentioning a S-1- which we know the GSEs dont necessarily have to do since they are Exempt Issuer - government entities. A S-1 could be new shares or shareholder owned shares. I dont think they are going to exercise the warrants so the S-1 could be:

1. Newly issued UST Shares from a SPS Conversion - proceeds to the UST
2. Newly issued Shares from Fannie and Freddie - raising $ 30 bn new CET1 Capital
3. Newly issued Shares as part of a Rights Offering - where the UST would sell their Rights for $ 30 bn and existing Shareholders could sell rights or purchase new shares at the Rights Subscription price - UST could raise $ 30bn for the UST and Fannie and Freddie would raise new capital at the Rights Subscription Price. Since the price after the deal terms announcement could trend toward $500bn plus total valuation - there could be a significant value in the rights if the Subscription Price is based on current average prices of low single digits. Kind of an Intel like scenario with obvious Trump Bump.