Starting over again. Fannie had a very small portfolio of fixed interest preferred shares outstanding in the period leading up to the crisis years of 2007/2008. It did 2 IPO's in 2000, 1 in 2001 & 2002 and 3 in 2003. The total outstanding was 55 M pfd shares at the end of 2003, all at a $50 par value. These obligations had a blended coupon rate of around 5.75%.
Fannie Mae issued no further pfd shares until basically the end of 2007. Then between September 2007 and May 2008, Fannie issued 445 M $25 par pfd shares at a blended coupon of around 8%. Why the rush to issue about $12 B in high dividend fixed interest pfd shares while the economy, in general, and the housing market, in particular, were in free fall? How does this support the "all was well, no bailout needed" claim? Why with interest rates falling due to Fed actions did Fannie so aggressively inflate its fixed dividend rate? How much of this near $1 B per annum dividend expense was considered in Monday-morning quarterback forensic accounting studies?
Serious questions arise. Maybe there is a genuine STINK in this Fanniegate saga, and just maybe its source came directly from Fannie Mae before the government ever stepped in.
None of my concerns formed the basis for the earlier class action shareholders actions already settled via court action.
JMHO.
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