Replies to post #12275 on Fannie Mae Preferred S (FNMAS)

[Donotunderstand]

People bought shares of GM and Citi and AIG and all types of companies that have gone 11 and come out


Regardless of the reasons (self inflicted or funked by banks and events beyond their control? ) - FNMA did find itself in a one hell of a mess and in need of Billions of dollars in cash with only the GOV as a potential lender/investor in 2008.

Reality is without GOV cash - FNMA would have had to go Ch 11 and kill equity 100%

Now- IMO - the GOV during the mess could have killed equity in FNMA (GM did kill all equity and bond holders became part of the new equity as example)

But - again IMO - by leaving 20% of common and all jr prfds "out there" and using a Conservatorship and not 11 back then - well, now that FNMA is "paying back" the "cash" - the GOV lost any window to kill it

But I am not the king and rules were made to be broken

Remember - an IPO of 80% of common is likely a renewal of current pfds - especially given that so many are held by community banks and pensions etc.