Replies to post #817042 on Fannie Mae-No Politics (FNMA)

[stockprofitter]

Sticky :)

[JSmith5]

Read the contracts there is no provision that allows for a conversion - NOT going to happen.
There are only a few JPS contracts out there that will allow for it the majority of them have no clause for conversions.

I need to address this because it gives the impression that only a few of the series of Junior preferred shares can be converted to common shares. This is wrong. All the series of preferred can be converted. The person who posted this clearly and unambiguously did not do their due diligence. I want to note that it has been pointed out numerous times on this Board that, even if the shares say non convertible it means that the Government cannot force a conversion, but that, if the shareholders agree to it (2/3s or more majority) they can be converted.

Just addressing Fannie, the following is information from an SEC filing by Fannie Mae.

EX-4.1 2 descriptionofsecuritie.htm EXHIBIT 4.1
Description of the Registrant’s Securities Registered Pursuant to Section 12
of the Securities Exchange Act of 1934.

Section 303(a) of the Fannie Mae Charter Act, which we refer to as the Charter Act, provides that Fannie Mae shall have common stock, without par value. The Charter Act also provides that Fannie Mae may have preferred stock on such terms and conditions as the Board of Directors shall prescribe.
The Charter Act contains no limitation on the amount of common stock that we may issue, and we are currently authorized under our Bylaws to issue 700,000,000 shares of preferred stock, having no par value.
As of December 31, 2019, our issued and outstanding capital stock consists of both common and preferred stock, as follows: (it lists the number of shares of common and individually lists all the series of juniors).

Description of Preferred Stock
Fannie Mae has sixteen outstanding series of preferred stock registered pursuant to Section 12 of the Securities Exchange Act of 1934 (collectively, the “Preferred Stock”). The rights of holders of each series of Preferred Stock are set forth in the Certificate of Designation of Terms for such series. The terms of the various series of Preferred Stock are substantially similar to one another, and the following description summarizes the rights applicable to all series of Fannie Mae Preferred Stock, unless otherwise noted....

The following summary description is qualified in its entirety by, and should be read in conjunction with, the Charter Act, Fannie Mae’s Bylaws, the applicable Certificate of Designation of Terms for each series of preferred stock. As discussed in greater detail in our Bylaws, pursuant to FHFA regulation, Fannie Mae follows the applicable corporate governance practices and procedures of the Delaware General Corporation Law to the extent not inconsistent with the Charter Act and other Federal law, rules, and regulations...

Voting Rights
Holders of Fannie Mae Preferred Stock are not entitled to any voting rights, either general or special.
Holders of shares of a series of Preferred Stock are entitled to one vote per share on amendments to the Certificate of Designation of Terms for such series of Preferred Stock, and the consent of the holders of two-thirds of the shares of a series of Preferred Stock is required to effectuate any such amendment.

I hope this helps and puts the issue of whether or not they CAN BE converted to rest. However, it does not put to rest the issues of whether or not they should be. And, as to the issue of whether or not the will be - only time will tell.

Hope this helps all.

Nats