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  • Comment Detail

  • Date: 01/10/22
    First Name: Rodney
    Last Name: Fernandez
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AB16

  • Comment

    If the FHFA and Treasury are determined to keep the companies in perpetual conservatorship pay the Shareholders fair market value compensation.

    Fannie Mae: Treasury should buy the Shareholders out, $230 billion for the Common Stock and $19 billion for the Junior Preferred Stock; $249 billion is pocket change. The Treasury owns the rights to create money and a few billion dollars is nothing when creating trillions is the normal. The amount value of $19 billion for the Junior preferred stock comes from page 80 Fannie Mae Third Quarter 2021; line 2 / commitments and contingencies; that's the coupon amount (par-value) for the JPS.

    If the Treasury would buy out the Shareholders, the lawsuits would go away and at $249 billion that's a deal. The liabilities on the books of $4.2 trillion is backed by real property, it's not really liabilities at all, tangible assets: Treasury receives the Earnings Power of the Business, and on top of that the Capital Gains Tax Treasury receives from the buyout of the Shareholders at a minimum of 20% long term gain, calculates an approximate $46 billion from the Common Shareholders. In addition, Capital Gains Tax from the buyout of the Junior Preferred Shareholders: Finale total buyout is less than $200 billion and the Treasury receives approximately $16 billion in net income per year.

    Fair Market Value

    Fannie Mae’s common stock outstanding 1,158,087,567

    Fannie Mae’s net earnings 4 billion per quarter, a projection of 16 billion net per year. I think the Market would willingly pay a Market Cap of 230 billion easily for that amount of earnings: 230 billion / 16 billion = Price to Earnings Ratio 14.37 (fair value).

    Market Cap 230 billion / 1,158,087,567 = $198 Per Share Intrinsic Value.

    What’s so hard about this?

    Thirteen years plus in conservatorship is too long, free the Shareholders.

    Thank you

    Rodney T Fernandez

    Shareholder Fannie Mae / Freddie Mac