Replies to post #704878 on Fannie Mae-No Politics (FNMA)

[5bagger]

I don't think that word means what you think it means.

"Recapitalization" is something different than retaining capital.

Every company that doesn't issue a dividend is retaining their capital and adding to the underlying value... every quarter.

So, F&F may be retaining capital, but like so many companies "recapitalizing" is not happening.

A recap is somehow changing the cap. structure, usually with stock, pref. stock, bond purchases and buy-backs.

[FFFacts]

The letter agreement states otherwise and I go by the hard documents and facts not accounting gimmickry. See page 5 and 6.

https://home.treasury.gov/system/files/136/Executed-Letter-Agreement-for-Fannie-Mae.pdf

Retaining cash earnings and recapitalization are 2 very different things. It may very well have been the intent of Calabria to renegotiate the liquidation preference at a point where there was enough retained earnings but he never got the chance to do so. The net worth sweep or dividend did not fully go away.