Fannie Mae Preferred S (FNMAS)

[rosen62]

Ok. I made a mistake on figures and dates. Here is the ammendment that explains the sweep:

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For each Dividend Period from January 1, 2013 through and including December 31, 2017, the Dividend Amount for a Dividend Period is the amount, if any, by which Freddie Mac’s Net Worth Amount at the end of the immediately preceding fiscal quarter, less the Applicable Capital Reserve Amount, exceeds zero. For each Dividend Period from January 1, 2018, the Dividend Amount for a Dividend Period means the amount, if any, by which the Net Worth Amount at the end of the immediately preceding fiscal quarter exceeds zero. The term Net Worth Amount is defined as (i) the total assets of Freddie Mac (excluding Treasury’s commitment and any unfunded amounts thereof), less (ii) its total liabilities (excluding any obligation in respect of capital stock, including the Senior Preferred Stock Certificate), in each case as reflected on Freddie Mac’s balance sheet prepared in accordance with generally accepted accounting principles. The Applicable Capital Reserve Amount, as defined in the Third Amendment, will be $3 billion for 2013 and will be reduced by $600 million each year until it reaches zero on January 1, 2018. If the calculation of the Dividend Amount for a Dividend Period does not exceed zero, then no Dividend Amount shall accrue or be payable for such Dividend Period.
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So it appears the net worth should be reduced to zero in 5 years or 20 quarters. Zero on Jan 1, 2018. Next quarter, when they announce next sweep we will know if it is (-600) mill/year or (-150) mill/quarter. That gives us plenty of time to pay taxpayers.