Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3668686 times)

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14180 on: November 07, 2019, 11:19:28 AM »
Another alternative (idea stolen from a twitter thread)
- SPS reduced by JPS litigation remedy bringing SPS down to $70bn
- $70bn SPS converted to common + warrants exercised
- UST new common stake sold to the market in a secondary

Two questions
- does bullet point 2 not work because it would bring UST ownership >80% temporarily? 
- under this method could current common shareholders receive the ability to do a rights offering allowing ability to not be diluted by the governments shares? 


Sunrider

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14181 on: November 07, 2019, 11:22:47 AM »
Freddie Mac retains McKinsey & Company to consult on capital management
https://business.financialpost.com/pmn/business-pmn/freddie-mac-retains-mckinsey-company-to-consult-on-capital-management

4 month engagement so plan/suggestion should be done by April. Not sure when this hits the market but seem like a majority of our fate price wise will be known then.

Oh boy, nearly the last company one might want to pick for this sort of work ... unless of course it's just to stamp the name on pre-determined output ...

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14182 on: November 07, 2019, 12:27:08 PM »
I never understood the notion that the government would try to monetize a portion of their senior pfds. If i'm their financial advisory i am telling them you can either:

a) retire the seniors in full and maximize the warrants via monetization. this would be most market / shareholder friendly and path of least resistance + builds some good will.

or

b) you can attempt to monetize some of the seniors by converting them to common, but that would add dilution, and lower the value of your warrants ultimately... so net net you are probably receiving the same $ proceeds.. and as a bonus there will be a lot of angry shareholders if you go down this path that may frustrate the efforts.

bottom line a monetizing a portion of snr pfds lowers ur warrant value. you are taking from 1 pocket and putting in another and is a path of more resistance for no reason.


Another alternative (idea stolen from a twitter thread)
- SPS reduced by JPS litigation remedy bringing SPS down to $70bn
- $70bn SPS converted to common + warrants exercised
- UST new common stake sold to the market in a secondary

Two questions
- does bullet point 2 not work because it would bring UST ownership >80% temporarily? 
- under this method could current common shareholders receive the ability to do a rights offering allowing ability to not be diluted by the governments shares?

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14183 on: November 07, 2019, 02:22:15 PM »
it may just me but this McKinsey hire is bupkis.  capital management not capital structuring or capital raising. nothing to see here

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14184 on: November 07, 2019, 04:15:04 PM »
it may just me but this McKinsey hire is bupkis.  capital management not capital structuring or capital raising. nothing to see here

I think your right. Not related to recapping it seems. False alarm. FHFA has said they will get their adviser first.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14185 on: November 08, 2019, 01:43:02 PM »
Can't add attachments for some reason but Lamberth had this to say, according to Peter A. Chapman...
Judge Lamberth released his opinion this afternoon and entered an order saying Treasury must produce the documents Fairholm's requested (or produce a privilege log identifying the documents it won't produce and the reasons why).
"I wait for You and my soul finds rest. In my selfishness, You show me grace..." My Hope Is In You by Aaron Shust https://www.youtube.com/watch?v=ugD0i5Y3cw8

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14186 on: November 08, 2019, 01:47:22 PM »
Can't add attachments for some reason but Lamberth had this to say, according to Peter A. Chapman...
Judge Lamberth released his opinion this afternoon and entered an order saying Treasury must produce the documents Fairholm's requested (or produce a privilege log identifying the documents it won't produce and the reasons why).

"To be frank, Treasury's Memorandum of Points and Authorities in Opposition to Plaintiffs' Motion to Compel Third-Party Discovery leaves the Court with more questions than answers."

"Treasury also has the resources to complete the requested production, and the Court will not entertain the preposterous notion that an agency as large as Treasury lacks the manpower to complete this request."
« Last Edit: November 08, 2019, 01:51:50 PM by Luke 5:32 »
"I wait for You and my soul finds rest. In my selfishness, You show me grace..." My Hope Is In You by Aaron Shust https://www.youtube.com/watch?v=ugD0i5Y3cw8

DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14187 on: November 08, 2019, 02:27:28 PM »
Why doesn't lamberth give a required by date and what is a 'timely' period?
[E]xpedience does not license omnipotence.

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james22

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14188 on: November 11, 2019, 02:15:12 AM »
He argues that the government wants total control over the recapitalization and release of the GSEs and over their operations “for now and the future.” He also said that the courts will be the ones to provide “meaningful gains” for shareholders in the fight against the net worth sweep.

Bove also believes that some assumptions many shareholders are making are just wrong. For example, he doesn't expect that the government will ever concede that the senior preferred shares and their dividends have been paid. He noted that during the Senate hearings, it became clear that the Treasury secretary believes the U.S. government is a creditor of Fannie Mae and Freddie Mac even though there is no outstanding debt. In Bove's view, it looks like Secretary Steven Mnuchin sees the senior preferred shares owned by the government as debt rather than preferred equity.

He also believes the government will "take a hefty fee for providing any guarantees to Fannie Mae and Freddie Mac."


https://www.valuewalk.com/2019/11/fannie-mae-freddie-mac-senior-preferred-stock/
BRK, BAM l SV, EM l Fannie Mae, Freddie Mac l Stable Value, Cash Value

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14189 on: November 12, 2019, 11:30:56 AM »
The securities prices remain entrenched in their five month (so far) long bear market.  I wonder what muscleman is currently seeing in the charts, he's had the hot hand of late.