Question, how much commitment money did Treasury actually deposit into the account of the companies? Money recorded on the balance sheet?
I understand,
No cash given there was consideration given because the UST agreed to provide up to $100 billion additional funding at the time to calm the MBS markets.
The FHFA gave the companies to the Treasury for a commitment of $100 billion, the day the SPSPA was signed, later date increasing to $200 billion, in addition, 79.9% ownership of the companies common stock. This took place when the FHFA freely admitted the companies were adequately capitalized. The Treasury paid no money.
The commitment was $100 billion increased to $200 billion before the cut off date in 2009, the cut off date to purchase obligations.
The U.S. Department of the Treasury (Treasury) provides Fannie Mae and Freddie Mac with financial support through the Senior Preferred Stock Purchase Agreements (SPSPAs), which were executed on September 7, 2008, one day after Fannie Mae and Freddie Mac entered conservatorships.
In exchange for Treasury’s financial support, the SPSPAs require Fannie Mae and Freddie Mac, among other things, to make quarterly dividend payments to Treasury, provide Treasury with a Liquidation Preference, and beginning in 2010 pay Treasury a periodic commitment fee that reflects the market value of the outstanding Treasury commitment, as well as Stock Warrants for the purchase of common stock representing 79.9% of the common stock of Fannie Mae and Freddie Mac, respectively, on a diluted basis.
On May 6, 2009, Treasury and the Enterprises amended the SPSPAs, increasing Treasury’s commitment of financial support from $100,000,000,000, respectively, to $200,000,000,000, respectively.
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