Thanks for the question. I am going off the ERCF Reporting and the fact that FNMA has reported a return on CET1 Capital with Buffers for two quarters in a row. My assumption is that there is no indication that the ERCF will be revised in the short term - Ackman only proposed it just like he said there was no reason for an offering. If the ERCF is revised to 2.5% - FNMA may not need the capital but I still think FMCC would. Based off the latest ERCF Filing - I have that FMCC will be $ 52 bn short of common equity and FNMA will be short $ 42 bn (YE 2025 estimate) ASSUMING the SPS balances are allocated to Retained Earnings. I think many people are confusing the reported Net Worth numbers with ERCF CET1 calculations - the ERCF numbers are much lower because there are large net negative balances for Retained Earnings and Common Stock on the balance sheet. DTAs will be added back but it still does not dig FMCC out of the hole. I cant remember what happens at 2.5% but I think FNMA would be ok but FMCC really could be helped by a JPS conversion. I just dont see Trump not cleaning up the JPS at the beginning because it makes for a clean balance sheet and would be a good outcome for both JPS and Common. Why would Trump not want to help JPS if Common was going to do well?
Here is the ERCF Filing for FMCC at the end of the 3Q. The 2.5% level is the same as Tier 1 capital requirement or $ 70 bn. If you assume that the SPS is converted to Retained Earnings (except for the original $ 1bn ) CET1 capital is approx $ 47 bn so even at 2.5% - FMCC is short $ 23 bn. With a DTA add back of approx. $ 5 bn and a JPS Conversion of $ 14 bn - FMCC will get really close by year end 2025 at the 2.5% level. I should mention that when I said there was a negative common stock balance on the Balance Sheet - I meant Treasury Stock - you can see it all on Page 8.
Market Data 
Markets 
AI
