Replies to post #657355 on Fannie Mae-No Politics (FNMA)

[RumplePigSkin]

lunch break - go look at section 2.2 Net Exercise of the warrant doc here.

https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/warrant/Fannie-Mae-Warrant.pdf

That is what is meant by net proceeds in the Treasury FY2012 doc here.

Page 8 https://www.treasury.gov/about/budget-performance/Documents/CJ_FY2012_GSE_508.pdf

Admittedly, the verbiage is not straight forward but it is what is referenced. Currently, the PSPA is not deemed paid, i.e., the liquidation preference is not written down to 0. If SCOTUS does say it is paid, then the warrants die on the vine. It is that simple.

Executing the warrants now is a problem and currently they are toxic due to the pending SCOTUS decision.