Replies to post #794099 on Fannie Mae-No Politics (FNMA)

[trunkmonk]

which is why release will be done down here, below institutional prices. and Ps will be nowhere near par cause they wont go up unless commons go up. their fantasy will be gone, KTCarneyCorkerShellGamer Amateur hour will be over.

[Golfbum22]

Cancel the warrants

Govt Should be deemed paid back

[Donotunderstand]

Thank you

and if GOV kills that obligation (v F and F pay cash to kill it) ---- ? can F and F then buy back for pennies the WTS

my sense - if GOV decides (Treasury) to say PAID BACK --- they will do it as ONE same step with exercise of the WTS and share ownership of 4B shares in their pocket

?????

[stockanalyze]

isn't it then illegal for them to take warrants at $0.00001 ? or does the comment below only applies to exercise price? it is kind of unfair to take 79.9% at $0.00001 with 300 billion already taken

“The exercise price was set at the average of the stock price during the 20 day period preceding the day that Treasury granted preliminary approval to participate in the CPP program”

https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/warrant/Fannie-Mae-Warrant.pdf

https://home.treasury.gov/news/press-releases/200962612255225533

[stockanalyze]

“The President has clearly stated that his objective is to dispose of the government's investments in individual companies as quickly as is practicable.”

[stockanalyze]

what does this mean? they did in aig case.
“For publicly-traded institutions, Treasury receives warrants to purchase common shares. Treasury has not exercised these warrants.”

[stockanalyze]

no capital raise as it dilutes their stake
“The warrants are also subject to customary "anti-dilution" adjustments in the event of other changes to the Company's capital structure, which is designed to ensure that Treasury's interest is not "diluted" by such changes.”

[stockanalyze]

interesting.. there are so many ways they can exit, completely subjective and speculative

Q: Is the number of warrants subject to reduction or adjustment?
A: Yes, a bank can reduce the number of warrants it issued to Treasury by 50% if it completes a qualified equity offering

[stockanalyze]

who are these 3 ? very curious
“Treasury has retained 3 asset managers and intends to use other outside consultants to assist Treasury in enhancing its process and independently assessing value of each repurchasing bank's warrants. “

[MRJ25]

When Treasury deems that the SPS has been paid, Fannie and Freddie can buy back the warrants based on previous 20 days average closing price.

Even the SPS can be sold back to FNF. GOV paid 1 billion for the SPS.

[Wise Man]

Quit comparing FnF with the banks, will ya?
FnF are congressionally-chartered private corporations with their own bailout mechanism to finance their operations (either buying Debt or Equity) as a last resort, in the same section (Purposes of the Charter) with their Public Mission that made them take on more credit risk and not properly compensated, with the authority of Treasury to purchase obligations at a rate that takes into consideration the Treasury yields, as of the end of the month preceding the purchase (subsection c)


There is not "govt backstop of the real estate market" or Govt Implicit Gtee on MBS, as stated by the plaintiff Joshua Angel in this board a few days ago, but a UST backup of FnF upon "capital deficiency" (SPSPA), that is, negative Net Worth (watch the chart with Freddie Mac below to see how it played out)

The law professor Nielson, SCOTUS-appointed amicus representing the FHFA in the important case Collins, spotted it right away.


The hedge fund managers that you know, forgot to pay him off.