Replies to post #832851 on Fannie Mae-No Politics (FNMA)

[JSmith5]

A redemption offer of par ($25/50)? Which btw, I believe WILL occur to the FNMAS issue either on or b4 the call date of December 31, 2025.

Redeeming FNMAS at the end of this year would be something that they should seriously consider. It may have other consequences such as in regards to the lawsuits, but the overall benefits could be compelling. They may also want to consider redeeming FNMAT while in the neighborhood. The costs would be high - a combined $9B - but it would take only about 6 months of Fannie profit to make this up.

FNMAS is now selling for about 53% of PAR and FNMAT for about 49% of PAR and both would pay over 8% if the dividends are turned on so it may be better for both the Gov's eventual ownership share and the legacy common for them to be taken off the table. It would be the cheapest of the options for dealing with them and are a significant share of the $33B outstanding JPS. At the current share prices, it's certainly not a "winfall" for JPS holders compared to what both the Government and legacy common shareholders are expecting. And would leave a bigger piece of the pie for everyone else when the GSEs begin to pay dividends again.

That being said, there are some negatives - especially taking $9B of cash out of the kitty at a time when its crucial to build up the cash as well as foregoing $9B towards capital if conversion (a net of $18 difference in that regard). And because of that, I believe that conversion is the mostly likely outcome. But redemption of the heavy hitters is certainly something that the powers that be should consider - especially this year.

I regard FNMAS as the "bellweather" stock of the GSEs and a great indicator or whether good or bad things are happening behind the scenes to those insiders in the loop. What does 53% tell you?

[stockanalyze]

no one knows. period. they can do it in so many ways. the bottomline is govt has been paid fully and were paid 10% dividend even when in conservatorship, with 30 billion more.

they should not be allowed to grab 80% of the company for 81K. that would be takings and nationalization.

these two companies have been used and misused with fraudulent loans, crt's and giveaways to banks.

while they are planning creative ways to get this done, one of them could be to offer maximum to those who bought before net worth sweep as others were not harmed by net worth sweep (think deep into lamberth jury trial and how it can be nullified).

ackman does not get to grab its profits as he purchased after net worth sweep while shorting our housing in 2008 and this whole thing is about harm due to net worth sweep where every penny was looted from the two. in short, it is a net worth sweep drama since 2012 that has been in play and value lies in there.

in the end, no one has a clue at this point. i feel if not done before mid terms, there would be very little hope left. may be if they release 10,000 docs that are hidden and if a smoking gun is in there.