The cash payout is voluntary retirement of a liability, is a business cost and gets removed from the income line. Take a look at the recent impact at NLY when one of its largest Seniors, 7 M shares of Series C, was just redeemed. This was a $25 par redemption (plus accrued divvies) and is very similar to FNMAS and FNMAT JPS. Huge one time hit on earnings.
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