本文发表在 rolia.net 枫下论坛As a finance professional, it's always better to keep up with what's goiong on in the market, esp. for hot ones like this. Here are some key points you should know about this deal:
1. both FNM & FRE have consented to be placed into conservatorship (receivership vs. conservatorship), effectively giving FHFa full control of the companies
2. There will be a limit on book growth for the GSEs - up to $850B
3. Both CEOs will be leaving (who are the new CEOs?)
4. Management actions will be limited and suspension of dividends on both common and prefered shares (That's why ppl are arguing preferred shares are worth close to nothing now - imagine indefinite debt paying zero interest)
5. Back each company by $100B (explicit support from the government - why it is good news for the housing market)
6. committed ongoing liquidity injection in exchange for senior preferred securities to all existing common and preferred shares (But not to debt)
7. What is the Treasury getting? $1B of senior pref. stock in each company and warrants at a norminal price on a fully -diluted basis for 79.9% of the common stock (That's why all the EPS estimates by analysts were revised down by 80%. Another question, why FRE dilution is less than dilution on FNM equity?)
8. GSEs will pay the Treasury a quarterly commitment fee for its explicit support starting Mar 31, 2010
9. target book size reduced to $250B
10. MBS Securities purchase program to support and mortgage market
11. GSE credit facility meant to serve as a credit backstop at LIBOR + 50 bps
What are the three objectives of this deal:
1. market stability
2. mortgage availability
3. taxpayer protection
Suggested readings: related articles on the Global and Mail更多精彩文章及讨论，请光临枫下论坛 rolia.net
1. both FNM & FRE have consented to be placed into conservatorship (receivership vs. conservatorship), effectively giving FHFa full control of the companies
2. There will be a limit on book growth for the GSEs - up to $850B
3. Both CEOs will be leaving (who are the new CEOs?)
4. Management actions will be limited and suspension of dividends on both common and prefered shares (That's why ppl are arguing preferred shares are worth close to nothing now - imagine indefinite debt paying zero interest)
5. Back each company by $100B (explicit support from the government - why it is good news for the housing market)
6. committed ongoing liquidity injection in exchange for senior preferred securities to all existing common and preferred shares (But not to debt)
7. What is the Treasury getting? $1B of senior pref. stock in each company and warrants at a norminal price on a fully -diluted basis for 79.9% of the common stock (That's why all the EPS estimates by analysts were revised down by 80%. Another question, why FRE dilution is less than dilution on FNM equity?)
8. GSEs will pay the Treasury a quarterly commitment fee for its explicit support starting Mar 31, 2010
9. target book size reduced to $250B
10. MBS Securities purchase program to support and mortgage market
11. GSE credit facility meant to serve as a credit backstop at LIBOR + 50 bps
What are the three objectives of this deal:
1. market stability
2. mortgage availability
3. taxpayer protection
Suggested readings: related articles on the Global and Mail更多精彩文章及讨论，请光临枫下论坛 rolia.net