Replies to post #511822 on Fannie Mae-No Politics (FNMA)

[Doc.007]

Sorry, it has always been that the Warrants as usually of what Warrants for, are only for Guaranty Purposes and Collateral is just another wording for Guaranty with the same Intent !

Warrants is coming from the wording Warranty.

[HoldenWalker99]

“Warrants are illegal” and “warrants are collateral” are nonsensical talking points; no one has provided evidence for these claims as long as I’ve been reading.

[ano]

Warrant and SPSPA Zoom out version

Please provide the source for the conclusion that the warrants cannot be exercised. I have been looking rather hard for one.The assertion that they were collateral is simply untrue based on the SPSPA and language in the warrants themselves.

if the government puts a company that is in distress under conservatorship, they demand something back as an insurance for the money they provide, when the funds are returned the government pulls out and releases the company, the government is not a for profit company, as a lot seem to think, they only can assist, so ones the funds are returned (and FnF returned more then they received) they are obligated to pull back, as for proof this is also mentioned in the warrant itself:

“THIS ("warrant”) CERTIFIES THAT, for value received the United States Department of the treasury…. Is entitled to purchase at the exercise price…shares of common stock, no par value, of the company, as provided herein” http://www.treasury.gov/press-center/press-releases/Documents/warrantfnm3.pdf

However the document does not clarify, for what exact value the warrant is given, but the warrant is given to treasury as an “Initial Commitment Fee” so for free (See https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2008-9-26_SPSPA_FannieMae_RestatedAgreement_N508.pdf) the warrant is dated 9/7/2008 and the SPSPA 9/26/2008, with knowing that the government received the warrant to receive 79.9% of the company for free, and the common stock was trading at $0.74 at the time, so buying the shares of a company (or receive a warrant for it) for 0.00001 (one thousands of a cent) is not legal, even if you are the government, at least when you want it executed, the whole scheme of course was to liquidate the company and then it would not have been a problem and nobody would have bothered.

so when the SPSPA is called void, there no longer is legal basis to enforce the warrant as the SPSPA funds have been returned and the legal basis for the warrant is FnF “receive value” for the warrant, and with the implicit guarantee FnF have there is no basis either for a credit support to be called valuable.

As for the SPSPA
FHFA forced FnF into the SPSPA preferred Series 2008-2 with treasury, under the terms:

Conservator (FHFA) has determined that entry into this Agreement is (i)
necessary to put Seller in a sound and solvent condition; (ii) appropriate to carry on the business
of Seller and preserve and conserve the assets and property of Seller; and (iii) otherwise consistent
with its powers, authorities and responsibilities.”https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2008-9-26_SPSPA_FannieMae_RestatedAgreement_N508.pdf

treasury bought in the “Initial Commitment Fee” one million (1,000,000) shares of Senior Preferred Stock, with an initial liquidation preference equal to $1,000 per share ($1,000,000,000 (one billion dollars) liquidation preference in the aggregate), and (b) the Warrant.
in the last report the total value is 120 Billion of 2008-2 pref shares
so eventhough every cent is paid under the original contract all remain open under the 3th
http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2018/q42018.pdf

and as fannie claims in their Form 8-K

“The Senior Preferred Stock AND Warrant were sold and issued to Treasury as an initial commitment fee in consideration of the commitment from Treasury (the “Commitment”) to provide funds to Fannie Mae under the terms and conditions set forth in the Senior Preferred Stock Purchase Agreement.”
https://www.sec.gov/Archives/edgar/data/310522/000095013308003096/w67133e8vk.htm

and as Treasury may waive the periodic commitment fee for up to one year at a time, in its sole discretion, and they have done just that the last 8 years, and with FnF being profitable since 2012 the necessity of a commitment from treasury to provide funds to Fannie Mae is no longer needed, so it should be void and thereby the SPSPA and warrant, and no commitment fee to treasury is due IMO, any other thought, let me know..