Replies to post #85705 on Fannie Mae-No Politics (FNMA)

[obiterdictum]

No. It is referring to common stock shareholders.

Millstein suggests that the US Treasury follow the lead of the AIG repayment and gain scheme.

To do that, he suggests that US Treasury converts its senior preferred stock into common stock and then sell these common stock shares to private shareholders in public offerings.

For example, in AIG's case, the US Treasury obtained common and preferred shares from AIG when bailing AIG out for 182 billion. In November 2008, it purchased AIG preferred shares with TARP funds. Then US Treasury converted a portion of the preferred shares into common shares as part of an AIG recapitalization plan. This was completed in January 2011.

The Treasury then made six public offerings of the common stock over a two year period from May 2011 to December 2012 after receiving the common shares in 2011. The US Treasury sold 1,655,037,962 shares of AIG common stock, at an average price of $31.18, with a range between $29 to $32.50 per share through those public offering for a total of 51.6 billion dollars. This amount represents only a portion of the monies repaid to the US Treasury.

The whole process, which is not included here, was very complicated...not something to follow...