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mg0516

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    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    From the 2008 Agreement:

     

    http://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2008-9-26_SPSPA_FannieMae_RestatedAgreement_N508.pdf

     

    "3.3. Increases of Senior Preferred Stock Liquidation Preference as a Result of Funding under

    the Commitment. The aggregate liquidation preference of the outstanding shares of Senior

    Preferred Stock shall be automatically increased by an amount equal to the amount of each draw

    on the Commitment pursuant to Article 2 that is funded by Purchaser to Seller, such increase to

    occur simultaneously with such funding and ratably with respect to each share of Senior Preferred

    Stock. "

     

    Fannie drew $117B (table 1 pg 2):

    http://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/TSYSupport10012014.pdf

     

    with $130B paid back to Treasury (table 2 page 3)

     

    Does the liquidation preference decline byt he amount of the dividends paid back to Treasury or does the Liq Pref remain on the amount drawn of $117B and not decline?

     

    Clearly a material item that I don't have a clear answer to...

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