Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3720512 times)

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12990 on: July 17, 2019, 12:28:36 PM »
i noticed the part of this interview where calabria says most of the litigation issues will "go away" has been edited out from the video. i wonder whats up with that?

www.foxbusiness.com/markets/fannie-freddie-ipo-could-come-in-2020-fhfa-mark-calabria

Interesting, good catch.  Do you remember what timestamp (or roughly 1/4 way through, 1/2 way, etc.) of the interview he previously said that about the litigation?
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc


hardincap

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12991 on: July 17, 2019, 12:39:09 PM »
nope. it was picked up by bloomberg: https://www.bloomberg.com/news/articles/2019-05-08/fannie-freddie-may-be-released-without-congress-calabria-says

I think that if we can get them out of conservatorship and then we can set a path, I think a lot of those issues will go away, he said.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12992 on: July 17, 2019, 12:40:58 PM »
nope. it was picked up by bloomberg: https://www.bloomberg.com/news/articles/2019-05-08/fannie-freddie-may-be-released-without-congress-calabria-says

I think that if we can get them out of conservatorship and then we can set a path, I think a lot of those issues will go away, he said.

Thanks.
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12993 on: July 17, 2019, 02:05:54 PM »
nope. it was picked up by bloomberg: https://www.bloomberg.com/news/articles/2019-05-08/fannie-freddie-may-be-released-without-congress-calabria-says

I think that if we can get them out of conservatorship and then we can set a path, I think a lot of those issues will go away, he said.

the quote might have been edited because it doesn't make sense.  it's tough to 'get them out of conservatorship' before capital is raised and capital likely can't get raised if the lawsuits are outstanding.   

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12994 on: July 17, 2019, 02:25:40 PM »
https://twitter.com/jennablan/status/1151602915985022977?s=19

U.S. HOUSING FINANCE REGULATOR SAYS U.S. GOVERNMENT REPORT ON HOUSING FINANCE REFORM IS "ESSENTIALLY DONE," EXPECTS RELEASE IN LATE AUGUST, SEPTEMBER - INTERVIEW @Reuters @michelleprice36 @peteschroeder

https://mobile.reuters.com/article/amp/idUSKCN1UC2OE?__twitter_impression=true

2024....sounds like a sloooow capital build. Thoughts?
« Last Edit: July 17, 2019, 02:38:27 PM by Luke 5:32 »
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12995 on: July 17, 2019, 02:52:22 PM »
https://www.reuters.com/article/us-fannie-freddie-reform-libor/fannie-freddie-to-eventually-end-buying-libor-mortgages-fhfas-calabria-idUSKCN1UC2PO

Fannie, Freddie to eventually end buying LIBOR mortgages: FHFA's Calabria


NEW YORK (Reuters) - Fannie Mae and Freddie Mac will eventually halt purchases of U.S. home loans linked to the London interbank offered rate as that index is set to be phased out after 2021, Mark Calabria, the head of the Federal Housing Finance Agency, told Reuters on Wednesday.

LIBOR is referenced against $200 trillion worth of U.S. financial products, primarily in interest rate derivatives. There are roughly $1 trillion in adjustable-rate mortgages (ARMs), or about 6.5% of all U.S. home loans outstanding, which are reset against it.
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12996 on: July 17, 2019, 02:55:19 PM »
https://twitter.com/jennablan/status/1151602915985022977?s=19

U.S. HOUSING FINANCE REGULATOR SAYS U.S. GOVERNMENT REPORT ON HOUSING FINANCE REFORM IS "ESSENTIALLY DONE," EXPECTS RELEASE IN LATE AUGUST, SEPTEMBER - INTERVIEW @Reuters @michelleprice36 @peteschroeder

https://mobile.reuters.com/article/amp/idUSKCN1UC2OE?__twitter_impression=true

2024....sounds like a sloooow capital build. Thoughts?

This time frame seems long and either Calabria was just lowering expectations or he is looking to something like the Layton plan, retain earnings for a while and then do a re-ipo at the end, when greater assurance of success.  This timeframe would also give congress more time to pass something, which is something he apparently wants.  However, it could also involve a re-IPO up front, and just a conservative take on how much money could be raised by an issuer in conservatorship. 

I dont think he ever said that a release from conservatorship would come in next year or two, only that a capital raise could be expected in next year.  Just dont know whether this is different or not.

but think of it, if Fannie needs about $100B of capital (>3%), even if they raise $10B in a re-IPO up front, and they retain some $13B per year, they would only be halfway done after third year. 

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12997 on: July 17, 2019, 03:08:15 PM »
Page 24 of Moelis' updated blueprint created November 2018 estimated exiting conservatorship in 2021 with considerable action in 2018 Q4 (turn off NWS, adjust Senior Pref balance).   

Given that the plan is released August/September, and no considerable action like turning off NWS or adjust Senior Pref balance takes place before then, that's pretty much 1 year behind the timeline in the updated Moelis version... so if it is something similar to Moelis we'd be looking at year 2022 for exit from conservatorship.

If that's the plan, Calabria might as well say exit by or near the end of his term in April 2024. 

Updated Moelis for your reference: https://gsesafetyandsoundness.com/2018/11/09/oneyearlater/
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12998 on: July 17, 2019, 03:11:04 PM »
https://twitter.com/jennablan/status/1151602915985022977?s=19

U.S. HOUSING FINANCE REGULATOR SAYS U.S. GOVERNMENT REPORT ON HOUSING FINANCE REFORM IS "ESSENTIALLY DONE," EXPECTS RELEASE IN LATE AUGUST, SEPTEMBER - INTERVIEW @Reuters @michelleprice36 @peteschroeder

https://mobile.reuters.com/article/amp/idUSKCN1UC2OE?__twitter_impression=true

2024....sounds like a sloooow capital build. Thoughts?

for jps, perhaps it likely depends -- among other things -- on if they convert into common at some point and/or turn on dividends before exiting conservatorship.  could be v good or v bad depending on the details.    would be about a little over $2bn annually to turn the dividends back on.  maybe this explains the Hamish hume article a little.   

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12999 on: July 17, 2019, 03:15:29 PM »
would be about a little over $2bn annually to turn the dividends back on.  maybe this explains the Hamish hume article a little.

Meaning Hume's concerned that would be unfavorably good treatment for prefs over common?

"The contractual and legal rights of all shareholders should be left in place and respected equally. Anything else will be seen as playing favorites to Wall Street hedge funds that have invested disproportionately in the junior preferred stock. The contractual rights of those shares should be respected, but not favored over those of common shareholders."

https://www.americanbanker.com/opinion/recap-of-fannie-and-freddie-must-protect-shareholder-rights
« Last Edit: July 17, 2019, 03:21:08 PM by Luke 5:32 »
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc