Replies to post #776846 on Fannie Mae-No Politics (FNMA)

[DaJester]

"might there be a paragraph - near bye - ? that speaks to the ability to pay in shares of stock"

Not that I'm aware of. I do remember seeing the "in kind" language in the CBO report from Aug 2020. Bolded for emphasis.

"Originally, the Treasury was supposed to receive a fixed annual dividend equal to 10 percent of its outstanding share balance (12 percent if the dividend was paid in kind, with additional preferred shares, rather than in cash). In August 2012, the payment agreement was amended to require Fannie Mae and Freddie Mac to pay the Treasury essentially all of their profits (referred to as an income sweep)."

But I don't think this is correct based on the SPS Amendment language. I think the CBO was mistaking the method of accrual if the dividends were not paid in cash, or it's just sloppy language. It wasn't in more shares, just the increased LP of those shares. With the future dividend amount based on a percentage of the increased LP. Until the NWS happened anyway...