Fannie Mae-No Politics (FNMA)

[obiterdictum]

The proposal indicates what he intends. He says that 185 billion is considered repayment and that 2 billion plus a fair profit (of unknown amount) will be paid in by the 1st Q 2014 from the run off companies revenues (this is his assumption of Fannie's remaining 2 billion to net zero for Treasury draws).

Then 1) any proceeds coming from the run-off of the legacy books (net profits as dividends and distributions) till the conclusion of business and 2) the remaining of the proceeds and any retained earnings that will be left after the gradual and/or strategic liquidation of assets to pay for debt obligations (financing loans, etc), insurance claims and other liabilities at the conclusion of the businesses 3) will be distributed as profits and stockholder's equity to the various types of shareholders remaining in the order of the liquidation preference. So there are wind down proceeds over time and liquidation proceeds at the end.

The balance sheet has the current stockholders' equity at $11.617 billion after accumulated deficits (versus retained earnings) and Treasury stock costs are subtracted from the total of:
common shareholders - 687 million
preferred shareholders - 19.130 billion
Senior preferred - 117.149 billion

See: http://phx.corporate-ir.net/phoenix.zhtml?c=108360&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTkyMTI3NjAmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d#sBE5B9CCD847B2587CC9B7E4F6CD88837

This is not the actual stockholders equity of run-off companies since Berkowitz will take a heap of cash in his operating and cash asset purchase and he assumes a clearing of 117.1 billion from the Senior preferred by 1st Q 2014 from the net worth sweep.

Berkowitz et all would take at minimum 31.575 billion in existing restricted capital funds. That is the current number.

So in 2014, when the 117.149 billion is considered paid off, what would stockholder equity look like in dollars per share for a hypothetical 79.9% Treasury stake and a 20.1% common stake?

Note: that the number of shares would not be 1 billion outstanding. The Fannie Mae estimated number of common shares would be 5.762 billion shares issued due to the exercise of the 79.9% Treasury warrant.

In 2019 or so when the hypothetical liquidation end comes, when the assets are finally all sold off and all liabilities paid and settled, what would the stockholders' equity look like in dollars per share for a hypothetical 79.9% Treasury stake and a 20.1% common stake?

NOTE
Common shareholder are left in the run-off companies (Fannie and Freddie). Berkowitz said that the common shareholders may be offered a limited number of right issues of the new companies at some price along with those participating junior preferred and that the common shareholders may buy in as incremental capital into the New companies. Berkowitz is not definite on this. It is a consideration, but nothing in the documents, at this point in time, indicate certainty and finality on specifications of an offering of limited number rights issues to common shareholders.