Replies to post #776429 on Fannie Mae-No Politics (FNMA)

[LuLeVan]

What you are doing is stock price manipulation with Bradford86 and LuLeVan and you are clueless about financial matters, because you are mistaking the Net Worth built with SPS for regulatory capital

Please note that I'm LuLeVan, not Glen Bradford.

The net worth of FnF is not important for a release. What is important is that CET1 meets the required minimum. This minimum (FnF combined) is currently about $195 billion (= 2.5% HERA minimum of total assets).

To implement the capital raise, it would be sufficient for CET1 to increase to $55 billion: According to the 4th Letter Agreement, a maximum of 2 x $70 billion is allowed for the capital raise. This adds up to the required $195 billion.

CET1 is currently about -$138 billion. If the SPS were to "disappear" (whether by cancellation or conversion), CET1 would increase by $191 billion. We would then already be at $53 billion.

This means that the capital increase could be done right now, no matter what FnFs' net worth is.