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Federal National Mortgage Association Message Board

  • wynkwyn wynkwyn Apr 8, 2013 2:00 PM Flag

    Another Bloomberg article "Fannie Mae Profit May Swell Treasury Coffers..."

    The article is interesting to read. Bud, the last paragraph (Asset Sales) contains something difficult to understanding. It runs:
    Vanden Houten said the "firms may use asset sales to come up with the money for any unusually large payments tied to the non-cash accounting gains", ...."they probably will turn to the debt market, creating additions to their interest costs"... In January, Fannie Mae’s portfolio of liquid investments jumped by almost $28 billion, a sign it “may already have taken the first step toward raising longer debt for a Treasury payment,” Does that mean FNMA is aiming at paying off debt to the Treasury by selling assets and drawing money from the debt market? Does anyone one have a better explanatioin?

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    • This is a big news for us. We need to cheer it up. It might open bigger price tomorrow.

      Sentiment: Strong Buy

    • WYNKWYN, someone on the board previously mentioned about that 28B. If it is liquid investment, it is cash accounting gains, and NOT tied to non-cash accounting gains.

      To my understanding, tied to non-cash accounting gains may include

      1/ Assets Sales ( business , properties , etc )

      2/ Lawsuit Settlements

      3/ Not sure about DTA

    • Yes that caught my eye as well ; what does " drawing money from the debt market " mean ? what is " debt market " ? is it us the Commons in the stock market ? is Fannie coming to us the Commons in the debt market to raise money to pay the Treasury back ? Thoughts on this from everybody welcome

      Sentiment: Strong Buy

      • 2 Replies to ricknagra
      • The debt market is any market situation where the trading of debt instruments takes place. Examples of debt instruments include mortgages, promissory notes, bonds, and Certificates of Deposit. A debt market establishes a structured environment where these types of debt can be traded with ease between interested parties.

        This market often goes by other names, based on the types of debt instruments that are traded. In the event that the market deals mainly with the trading of municipal and corporate bond issues, it may be known as a bond market. If mortgages and notes are the main focus of the trading, it may be known as a credit market. When fixed rates are connected with the debt instruments, the market may be known as a fixed income market.

        Individual investors as well as groups or corporate partners may participate in a debt market. Depending on the regulations imposed by governments, there may be very little distinction between how an individual investor versus a corporation would participate. There are usually some regulations in place that require that any type of investor in debt offerings have a minimum amount of assets to back the activity, however. This is true even with situations such as bonds, where there is very little chance of the investor losing his or her investment.

        Sentiment: Strong Buy

      • maybe they convert prefered to commons and sell them in stock market after all debt payed, so they get back dividends, all the billions they put in F&F and + the sale of shares.
        So taxpayers get a lot of money from theyre investment...

        Sentiment: Strong Buy

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