Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4159668 times)

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14420 on: December 03, 2019, 07:18:05 AM »
@investorG

the biggest dissimilarity between C and GSEs is the presence of substantial GSE junior pref that is expensive and the holders of which hold a litigation get out of jail card against the govt, which works in favor of the junior pref.  if you have been through a few restructurings, you would know that financial advisors will want to eliminate existing expensive prefs, get everyone in the pool, and then be able to build the capital book with common and maybe some new cheaper prefs.  as for being able to pay dividends on common, the big point is that the book will be much larger with more buyers that will consider buying common; if the street believes that common won't get a dividend then you have lost a huge swath of potential buyers.

the most interesting takeaway from C that I forgot is that the govt expunged some of its warrants to make the capital raising successful.  could be a precedent for GSEs, which is a similarity that is interesting.


DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14421 on: December 04, 2019, 12:49:25 PM »
If Collins is found as direct claims does that end Washington federal as they argue that claims are derivative?
[E]xpedience does not license omnipotence.

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emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14422 on: December 04, 2019, 01:11:11 PM »
“Biggest risk is time. Not sure why the delay after 11 years as if they do not know everything by know.  Delay of each day adds up to the risk that is unwarranted at this point.  The previous admin is probably cooking up something to derail it “

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14423 on: December 04, 2019, 02:54:35 PM »
FSOC
https://home.treasury.gov/system/files/261/FSOC2019AnnualReport.pdf

In September 2019, Treasury and the FHFA agreed to modifications to the Preferred Stock Purchase Agreements (PSPAs) that will permit Fannie Mae and Freddie Mac to retain additional earnings in excess of the $3 billion capital reserves previously permitted by their PSPAs. Under these modifications, Fannie Mae and Freddie Mac will be permitted to maintain capital reserves of $25 billion and $20 billion, respectively. Treasury and Fannie Mae and Freddie Mac also agreed to negotiate an additional amendment to the PSPAs adopting covenants that are intended to further enhance taxpayer protections.
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14424 on: December 04, 2019, 04:29:38 PM »
If Collins is found as direct claims does that end Washington federal as they argue that claims are derivative?

apples and oranges.  in collins Ps are seeking to invalidate NWS as being beyond authority of conservator under HERA.  now whose claim is this, shareholders (direct) or corp (derivative)?  wash fed is a takings/illegal exaction claim under 5th A US const...which is clear that it is a claim of the shareholders' whose property was taken without compensation.  so no read over.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14425 on: December 05, 2019, 12:55:37 PM »
https://twitter.com/CGasparino/status/1202689866368200704
SCOOP: @FHFA soon to select adviser on massive @FannieMae @FreddieMac
 stock offering list narrorwed to several investment banks, including Perella Weinberg Partners, possibly PJT Partrners; Govt signaled decision after Thanksgiving to oversee massive IPO more now @FoxBusiness
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14426 on: December 05, 2019, 01:32:26 PM »
https://twitter.com/CGasparino/status/1202689866368200704
SCOOP: @FHFA soon to select adviser on massive @FannieMae @FreddieMac
 stock offering list narrorwed to several investment banks, including Perella Weinberg Partners, possibly PJT Partrners; Govt signaled decision after Thanksgiving to oversee massive IPO more now @FoxBusiness


either firm would be an excellent choice.  fhfa needs advisory work, not capital raising work which is where the bigger money will be, and those firms (JPM, Goldman etc) will do the underwritings.  PJT is a spin off from Blackstone, one of whose funds is partly behind the moelis blueprint.

I went to the moelis blueprint to confirm that Paulson and a Blackstone fund paid for the moelis blueprint, but their identities which I remember from the 2017 version seem to be absent from the 2018 update.  but I did reread the summary and recommendations again:

"The first step must be to begin rebuilding capital by suspending dividends paid to Treasury. The second step is to recognize the government’s profits by acknowledging that Treasury’s senior preferred stock has been repaid with interest. While the senior preferred remains outstanding, it will be impossible for the GSEs to raise equity from the private markets. The third step is for FHFA to direct Fannie and Freddie to submit capital restoration plans, as authorized by HERA. Taking these three steps immediately starts on the path towards restoring safety and soundness to protect American taxpayers."

seems like the moelis blueprint is off to a good start

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14427 on: December 05, 2019, 03:56:25 PM »
https://twitter.com/CGasparino/status/1202689866368200704
SCOOP: @FHFA soon to select adviser on massive @FannieMae @FreddieMac
 stock offering list narrorwed to several investment banks, including Perella Weinberg Partners, possibly PJT Partrners; Govt signaled decision after Thanksgiving to oversee massive IPO more now @FoxBusiness

They now have the incentive to beat Aramco's IPO lol.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14428 on: December 06, 2019, 08:53:19 AM »
ACG estimated timeline, as of 12-6-2019 (attached)...
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14429 on: December 06, 2019, 08:58:00 AM »
Looks like ACG's view is that the admin will do the "irreversible administrative steps" ahead of the election (settlement + pspa amendment) while leaving the heavy lifting / politically hairy steps (IPO) to post election. As Jr PFD holder our day will be those 2 key events in 2020. On a settlement with defined conversion terms / PSPA amendment to write down the snr pfds I would think jr pfds at the very least break 2019 highs of ~$14/shr, more likely $16-$20 range.