The wording in ALL legislative and agency (executive) creation and operation documents is dividends
It was never a loan - and likewise every bank under TARP was equity not a loan
I am not echoing anybody
I recall (with a weaker memory each year) that this was senior preferred stock
My broker license studies and test --- both tell me stock is equity (even if it looks like a bond and smells like a bond). Note the set 10% is a set dividend rate on PAR) Check out any JPS from any company - they all have set dividends.
HappyAlways, It was not referenced a "Loan".... The Treasury's Stock ( SPS )
BUT just because the SPS gets the dividend absolutely doesn't mean the SPS could not be redeemed.
WRITTEN AS CLEAR A DAY, Optional Pay Down of Liquidation Preference.
Any loyal conservator of Fannie and Freddie would take advantage of the refinancing option to end the bailout arrangement, by paying off the senior preferred in full.
READ THE TERMS OF THE CONTRACT
According to the 'Contract' the companies did not need Treasury's permission to pay down the LP.
The money swept by the Treasury apply it to LP and the 10% over payment returned to the companies the LP would be paid in full and the SPS would be redeemed and the SAME DAY IN TIME the companies could turn to the Market with a secondary IPO replacing the commitment.
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