The debt ceiling will be reached up by mid-October, early November. It is unlikely that the US Treasury would be able to prepare for an auction or other means to exercise the warrant on common shares or to offer the Senior Preferred shares, a doing that would be a precipitous move given the current share price and then its dilution with warrant. To raise the share price to book value, the FHFA and US Treasury would need to come to conclusive terms over the GSEs future status and condition and the exit strategy for leaving the conservatorship.
The amount of money used to pay the 80 million payments made every month is huge and at least 50 billion per month is needed in a cash balance to handle it according to Treasury Secretary Lew.
Obama has recently said that he will not negotiate about raising the debt ceiling from $16.7 trillion, so it is not much of an issue. Borrowing and other extraordinary measures may just happen as before. Perhaps later there will be a consideration of exercising the warrant and selling Senior Preferred Shares but not anytime soon as a means to ease the debt ceiling.
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