Replies to post #431776 on Fannie Mae-No Politics (FNMA)

[contrarian bull]

Maybe my math is way off

but if F and F "have to buy back" the Senior Paper the common stock is not worth a lot

the swap would be an agreement

Money paid as dividends already extinguishes the SR PAPER but leaves the warrants

Oh if only that were so! According to the SPSA those payments did not extinguish the senior preferred liquidation value. They still owe $185B.

Treasury has allowed F&F to hold back enough capital on the balance sheet to pay for those senior preferred shares, but it's not currently in cash.