FNMA 8¼ PERP

Federal National Mortgage Association

Credit, Finance/Real Estate, Event Driven/Special Sit


Publicly traded companies mentioned herein: Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corp (FMCC)

Highlights

The presenter is long shares of Federal National Mortgage Association (aka Fannie Mae) preferred stock via FNMA 8¼ PERP - Series T, and sees meaningful upside for shareholders to par ($25) from the $10-11 range. Fannie Mae’s history as a lender to low and middle income Americans - to buy homes - is relatively well known, but recent legal developments and the resolution of various lawsuits could lead to gains for patient shareholders. In his opinion, cases such as Fairholme, Perry Capital, and another regarding Fannie’s corporate charter (i.e., if it’s a Delaware company) could, if resolved in shareholders’ favor, send the preferred much higher.

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Idea Discussion

Commentor 1 - 2 weeks ago

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