Fannie Mae-No Politics (FNMA)

[obiterdictum]

Under the PSPAs, The US Treasury owns the warrant to purchase 79.9% of the common shares at a nominal price of $0.0001 and have until 2028 to exercise the warrant.

http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2012/10k_2012.pdf - page 30

The warrant was arranged so that the US Treasury would have the controlling interest in the GSEs.

The warrant has not been exercised so they have not claimed the common shares and do not own any at this time.

The US Treasury is not required to exercise the warrant.

If the warrant is exercised senior, junior and common shares are not liquidated. Additional common shares would be issued and added to the current outstanding common shares. The process of adding the shares will dilute the existing common share value.

Fannie Mae has estimated that 4.6 billion shares would be added if the warrant is exercised. So there would be 5.762 billion shares outstanding if the warrant is exercised.

http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q12013.pdf - p. 114. See note 2.

http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q22013.pdf - p. 121. See note 2.

(2) Includes 4.6 billion for the three months ended March 31, 2013 and 2012 of weighted-average shares of common stock that would be issued upon the full exercise of the warrant issued to Treasury from the date the warrant was issued through March 31, 2013.

(2) Includes 4.6 billion of weighted-average shares of common stock that would be issued upon the full exercise of the warrant issued to Treasury from the date the warrant was issued through June 30, 2013.