FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[Midas79]

I don't see how you would ever expect that kind of ratio - seems totally unrealistic IMO. If par was $25, then 2.5 based on $10 common would be more than reasonable. Also, if major P's believed that common could see $30 for example, they could agree to conversion in a settlement and it's possible gov could force the conversion for others without a vote. Wasn't this done with Citi?

 

No offense, but this is the kind of crazy talk that you see in so many other areas. You might say that you'd never accept less than 7 common shares/prf'd, etc., but if major P's agree to settle, then whose going to carry your litigation? A solution is going to have to be realistic. I'm interested in examining some scenarios that could have a reasonable probability of working based on factors at play.

 

I don't see any reason to believe that the commons would "catch up" to any set strike price. The only purpose of raising the strike price is to recap FnF in a way that doesn't make it obvious that the government is giving back the dividend overpayments.

 

The commons could very well rise because the warrants would finally be gone, but it would take more certainty about the future of the capital structure to have the shares really take off.

 

I got a ratio of 7:1 by looking at the current stock price. The par to common price ratio is about 6:1 right now but I would want a better deal due to the preferred dividends having been off for so long.

 

Edit: put it this way: I could get about 2.25 shares of common for each $25 preferred share right now. If I really wanted to convert to common around that ratio I'd just do it myself.

[Midas79]

pref conversion to common would be a capital nonevent. 

 

Thanks for that. I brought it up because I saw the core capital listed in the 10-K as including (junior) preferred par value of $19B.

 

midas, if govt stated that prefs would not be getting dividends and the trading price of pref is 85%, would you think differently? (in order to freeze out prefs divs cant declare common divs, but i could see this being SOP during capital rebuild period).

 

I'm not quite sure what "trading price of pref is 85%" means. Is it

• the then-current market price of preferreds would be 85% of par (FNMAS is trading at 21.25)
  
• preferreds would be offered conversion based on 85% of their par values, or
  
• something else?
  

 

When it comes down to it, I don't own nearly enough shares to actually influence the 2/3 voting of any preferred series. I'm just trying to think of what Berkowitz, et al. would want.

[Flynnstone5]

I don't see how you would ever expect that kind of ratio - seems totally unrealistic IMO. If par was $25, then 2.5 based on $10 common would be more than reasonable. Also, if major P's believed that common could see $30 for example, they could agree to conversion in a settlement and it's possible gov could force the conversion for others without a vote. Wasn't this done with Citi?

 

No offense, but this is the kind of crazy talk that you see in so many other areas. You might say that you'd never accept less than 7 common shares/prf'd, etc., but if major P's agree to settle, then whose going to carry your litigation? A solution is going to have to be realistic. I'm interested in examining some scenarios that could have a reasonable probability of working based on factors at play.

 

I don't see any reason to believe that the commons would "catch up" to any set strike price. The only purpose of raising the strike price is to recap FnF in a way that doesn't make it obvious that the government is giving back the dividend overpayments.

 

The commons could very well rise because the warrants would finally be gone, but it would take more certainty about the future of the capital structure to have the shares really take off.

 

I got a ratio of 7:1 by looking at the current stock price. The par to common price ratio is about 6:1 right now but I would want a better deal due to the preferred dividends having been off for so long.

 

What do mean catch up? You'd have 5B shares at a market cap of $150B - $30/pps. The exercise price just means that Fannie Mae keeps the money raised per share up to that price, then the gov receives anything above.

 

Recap of $65-$75B in 3-4 years easy.

 

New prfd issuance of 10% = $15B

Exercise price $10 x 2B shares = $20B or $30B if raised to $15

3-4 years retained earnings @ $10B = $30-$40B

 

You don't think Berkowitz or any prf'd holder would want $75 instead of their $25 par? Even if they issued another 1B in additional common shares, you're still at $25 and co. raises another 25B.

 

We've got an admin. that wants to preserve the companies, has said it's a top priority, has mentioned stakeholders, appears to respect property/shareholder rights and knows housing is an economic key. Does the idea of just diluting the hell out of common really fit? Obama/HRC I'd say sure, they'd steal every penny for the gov, but it just doesn't seem to fit under Trump.

[Midas79]

What do mean catch up? You'd have 5B shares at a market cap of $150B - $30/pps. The exercise price just means that Fannie Mae keeps the money raised per share up to that price, then the gov receives anything above.

 

Recap of $65-$75B in 3-4 years easy.

 

New prfd issuance of 10% = $15B

Exercise price $10 x 2B shares = $20B or $30B if raised to $15

3-4 years retained earnings @ $10B = $30-$40B

 

You don't think Berkowitz or any prf'd holder would want $75 instead of their $25 par? Even if they issued another 1B in additional common shares, you're still at $25 and co. raises another 25B.

 

By "catch up" I meant using the strike as part of the conversion ratio. $25 par divided by $10 gives the 2.5 ratio in your post on the previous page. I had assumed that you got the $10 from the hypothetical new strike price on the warrant. Apologies if that's not what you meant.

 

Under the (admittedly unrealistic) assumption that Berkowitz could sell any quantity of his holdings in FNMAS for current market prices, he could get 2.45 shares of FNMA for each share of FNMAS. He has chosen to stay entirely in the preferreds.

 

The preferreds offer contractual rights and much more certainty than the commons. I just think the deal would have to be sweetened considerably given that your conversion ratio is achievable in the market right now.

 

As an aside, if the government could force a conversion I think they would have done so by now. That would neuter many of the lawsuits that rely on breach of contract claims.

[Parsad]

Sorry folks, I was in meetings all yesterday and the day before, and didn't know what was going on.  That gremlin is gone now, as are most of his posts.  Cheers!

[Flynnstone5]

What do mean catch up? You'd have 5B shares at a market cap of $150B - $30/pps. The exercise price just means that Fannie Mae keeps the money raised per share up to that price, then the gov receives anything above.

 

Recap of $65-$75B in 3-4 years easy.

 

New prfd issuance of 10% = $15B

Exercise price $10 x 2B shares = $20B or $30B if raised to $15

3-4 years retained earnings @ $10B = $30-$40B

 

You don't think Berkowitz or any prf'd holder would want $75 instead of their $25 par? Even if they issued another 1B in additional common shares, you're still at $25 and co. raises another 25B.

 

By "catch up" I meant using the strike as part of the conversion ratio. $25 par divided by $10 gives the 2.5 ratio in your post on the previous page. I had assumed that you got the $10 from the hypothetical new strike price on the warrant. Apologies if that's not what you meant.

 

Under the (admittedly unrealistic) assumption that Berkowitz could sell any quantity of his holdings in FNMAS for current market prices, he could get 2.45 shares of FNMA for each share of FNMAS. He has chosen to stay entirely in the preferreds.

 

The preferreds offer contractual rights and much more certainty than the commons. I just think the deal would have to be sweetened considerably given that your conversion ratio is achievable in the market right now.

 

As an aside, if the government could force a conversion I think they would have done so by now. That would neuter many of the lawsuits that rely on breach of contract claims.

 

No. I'm using a par of $25 and a common of $10 because as this proceeds, I believe the common trade up and this fits with historical ratio between the two. Of course Berkowitz isn't making a move now given prfd's are more secure, but if was offered such a settlement knowing the admins plan moving forward, capital structure and expected pps based on that, of course he would take that.

 

No chance the gov would have forced anything by now. Obama admin was about fighting P's and never releasing. Trump is exact opposite. We don't even have Sessions as AG yet.

[Midas79]

Having read the offering circulars for Fannie Mae preferreds, I don't see how a forced conversion can happen at all.

 

FNMAS circular: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf

 

Page A-5, Section 3(d):

(d)

The  Series  S  Preferred  Stock  will  not  be  subject  to  any  mandatory  redemption,  sinking  fund  or  other  similar  provisions.  In  addition,  Holders  of  Series  S  Preferred  Stock  will  have  no  right  to  require redemption of any shares of Series S Preferred Stock.

 

Page A-6, Section 7(b) (partial):

(b)

Without the consent of the Holders of Series S Preferred Stock, Fannie Mae will have the right to amend, alter, supplement or repeal any terms of this Certificate or the Series S Preferred Stock (1) to  cure  any  ambiguity,  or  to  cure,  correct  or  supplement  any  provision  contained  in  this  Certificate  of  Designation that may be defective or

inconsistent with any other provision herein or (2) to make any other provision with respect to matters or questions arising with respect to the Series S Preferred Stock that is not  inconsistent  with  the  provisions  of  this  Certificate  of  Designation  so  long  as  such  action  does  not materially  and  adversely  affect  the  interests  of  the  Holders  of  Series  S  Preferred  Stock

 

It appears a forced conversion would be inconsistent with the first sentence in section 3(d). And we already know that the major preferred holders are willing to fight for their contractual rights in court, so a "we're going to do this anyway, see you in court" stance by the government is unlikely.

[investorG]

Having read the offering circulars for Fannie Mae preferreds, I don't see how a forced conversion can happen at all.

 

FNMAS circular: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf

 

Page A-5, Section 3(d):

(d)

The  Series  S  Preferred  Stock  will  not  be  subject  to  any  mandatory  redemption,  sinking  fund  or  other  similar  provisions.  In  addition,  Holders  of  Series  S  Preferred  Stock  will  have  no  right  to  require redemption of any shares of Series S Preferred Stock.

 

Page A-6, Section 7(b) (partial):

(b)

Without the consent of the Holders of Series S Preferred Stock, Fannie Mae will have the right to amend, alter, supplement or repeal any terms of this Certificate or the Series S Preferred Stock (1) to  cure  any  ambiguity,  or  to  cure,  correct  or  supplement  any  provision  contained  in  this  Certificate  of  Designation that may be defective or

inconsistent with any other provision herein or (2) to make any other provision with respect to matters or questions arising with respect to the Series S Preferred Stock that is not  inconsistent  with  the  provisions  of  this  Certificate  of  Designation  so  long  as  such  action  does  not materially  and  adversely  affect  the  interests  of  the  Holders  of  Series  S  Preferred  Stock

 

It appears a forced conversion would be inconsistent with the first sentence in section 3(d). And we already know that the major preferred holders are willing to fight for their contractual rights in court, so a "we're going to do this anyway, see you in court" stance by the government is unlikely.

 

forced conversion is highly unlikely.

 

in the positive scenario for shareholders, if it comes, either a voluntary conversion at some ratio is offered (with the stick of no preferred divs turned on until full capitalization is reached) or there would be no conversion and prefs would get divs at some threshold point. i doubt dividends would be turned on initially.

 

common capital is superior to preferred capital in the current regulators' eyes.  that is one reason why conversion is possible.  from the preferred holders' point of view it's a chance for either liquidity and/or further upside potential past par over time.

 

basically now there is a mini-freakout among common when they see the preferred run without them. there are random guys writing about 10pct capital ratios which is scaring some on excess dilution fears.  i will revert back to what's good for one is good for the other and root for smooth sailing on the confirmation path.  good luck, everyone

[Flynnstone5]

Having read the offering circulars for Fannie Mae preferreds, I don't see how a forced conversion can happen at all.

 

FNMAS circular: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf

 

Page A-5, Section 3(d):

(d)

The  Series  S  Preferred  Stock  will  not  be  subject  to  any  mandatory  redemption,  sinking  fund  or  other  similar  provisions.  In  addition,  Holders  of  Series  S  Preferred  Stock  will  have  no  right  to  require redemption of any shares of Series S Preferred Stock.

 

Page A-6, Section 7(b) (partial):

(b)

Without the consent of the Holders of Series S Preferred Stock, Fannie Mae will have the right to amend, alter, supplement or repeal any terms of this Certificate or the Series S Preferred Stock (1) to  cure  any  ambiguity,  or  to  cure,  correct  or  supplement  any  provision  contained  in  this  Certificate  of  Designation that may be defective or

inconsistent with any other provision herein or (2) to make any other provision with respect to matters or questions arising with respect to the Series S Preferred Stock that is not  inconsistent  with  the  provisions  of  this  Certificate  of  Designation  so  long  as  such  action  does  not materially  and  adversely  affect  the  interests  of  the  Holders  of  Series  S  Preferred  Stock

 

It appears a forced conversion would be inconsistent with the first sentence in section 3(d). And we already know that the major preferred holders are willing to fight for their contractual rights in court, so a "we're going to do this anyway, see you in court" stance by the government is unlikely.

 

If the major P's can get a deal that provides more money to them through a conversion and the gov receives the benefit of a more manageable capital structure, why would anyone remain in court? Makes no sense.

[investorG]

I don't see how you would ever expect that kind of ratio - seems totally unrealistic IMO. If par was $25, then 2.5 based on $10 common would be more than reasonable. Also, if major P's believed that common could see $30 for example, they could agree to conversion in a settlement and it's possible gov could force the conversion for others without a vote. Wasn't this done with Citi?

 

No offense, but this is the kind of crazy talk that you see in so many other areas. You might say that you'd never accept less than 7 common shares/prf'd, etc., but if major P's agree to settle, then whose going to carry your litigation? A solution is going to have to be realistic. I'm interested in examining some scenarios that could have a reasonable probability of working based on factors at play.

 

I don't see any reason to believe that the commons would "catch up" to any set strike price. The only purpose of raising the strike price is to recap FnF in a way that doesn't make it obvious that the government is giving back the dividend overpayments.

 

The commons could very well rise because the warrants would finally be gone, but it would take more certainty about the future of the capital structure to have the shares really take off.

 

I got a ratio of 7:1 by looking at the current stock price. The par to common price ratio is about 6:1 right now but I would want a better deal due to the preferred dividends having been off for so long.

 

What do mean catch up? You'd have 5B shares at a market cap of $150B - $30/pps. The exercise price just means that Fannie Mae keeps the money raised per share up to that price, then the gov receives anything above.

 

Recap of $65-$75B in 3-4 years easy.

 

New prfd issuance of 10% = $15B

Exercise price $10 x 2B shares = $20B or $30B if raised to $15

3-4 years retained earnings @ $10B = $30-$40B

 

You don't think Berkowitz or any prf'd holder would want $75 instead of their $25 par? Even if they issued another 1B in additional common shares, you're still at $25 and co. raises another 25B.

 

We've got an admin. that wants to preserve the companies, has said it's a top priority, has mentioned stakeholders, appears to respect property/shareholder rights and knows housing is an economic key. Does the idea of just diluting the hell out of common really fit? Obama/HRC I'd say sure, they'd steal every penny for the gov, but it just doesn't seem to fit under Trump.

 

good plan.  please submit to the big guys.

 

also keep in mind that ackman and his public visibility are important in the treatment of common vs. preferred in any potential positive plan for justice.  he would call out any outrageous preferential treatment in what would likely already be a scrutinized scene.

[Sunrider]

That's very interesting. Thank you for pointing that out. I had read those docs but didn't recall seeing that.

 

Having read the offering circulars for Fannie Mae preferreds, I don't see how a forced conversion can happen at all.

 

FNMAS circular: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf

 

Page A-5, Section 3(d):

(d)

The  Series  S  Preferred  Stock  will  not  be  subject  to  any  mandatory  redemption,  sinking  fund  or  other  similar  provisions.  In  addition,  Holders  of  Series  S  Preferred  Stock  will  have  no  right  to  require redemption of any shares of Series S Preferred Stock.

 

Page A-6, Section 7(b) (partial):

(b)

Without the consent of the Holders of Series S Preferred Stock, Fannie Mae will have the right to amend, alter, supplement or repeal any terms of this Certificate or the Series S Preferred Stock (1) to  cure  any  ambiguity,  or  to  cure,  correct  or  supplement  any  provision  contained  in  this  Certificate  of  Designation that may be defective or

inconsistent with any other provision herein or (2) to make any other provision with respect to matters or questions arising with respect to the Series S Preferred Stock that is not  inconsistent  with  the  provisions  of  this  Certificate  of  Designation  so  long  as  such  action  does  not materially  and  adversely  affect  the  interests  of  the  Holders  of  Series  S  Preferred  Stock

 

It appears a forced conversion would be inconsistent with the first sentence in section 3(d). And we already know that the major preferred holders are willing to fight for their contractual rights in court, so a "we're going to do this anyway, see you in court" stance by the government is unlikely.

[waynepolsonAtoZ]

"Edit: put it this way: I could get about 2.25 shares of common for each $25 preferred share right now. If I really wanted to convert to common around that ratio I'd just do it myself."

 

Ditto!

 

The commons could (arguably) be worth, say, $100 per share assuming absolutely no earnings dilution. With massive earnings dilution they might be worth $8 per share or $20 or what have you. It's really anybody's guess at this point.

 

The preferreds have an RV of $25 per share. Pretty simple.

 

 

[Flynnstone5]

"Edit: put it this way: I could get about 2.25 shares of common for each $25 preferred share right now. If I really wanted to convert to common around that ratio I'd just do it myself."

 

Ditto!

 

The commons could (arguably) be worth, say, $100 per share assuming absolutely no earnings dilution. With massive earnings dilution they might be worth $8 per share or $20 or what have you. It's really anybody's guess at this point.

 

The preferreds have an RV of $25 per share. Pretty simple.

 

Totally agree. We don't know until terms of a settlement are known as to what that conversion will be. My point is simply that I believe a conversion is likely and that it will based on a value relative to the prfd par value. Should common hold then I think a historic 2.5:1 is realistic. If as you say we see dilution at $8, then 3:1 would be the ratio.

[waynepolsonAtoZ]

"I believe a conversion is likely."

 

Fair enough. I tend to think it's pointless to argue with people about their beliefs.

 

I've always stuck with the preferreds and with the idea that we'll go back to RV someday. I'm not saying it's the only way to look at it or that their is a high probability it's going to happen, but it tends to keep me away from worrying too much about the end game.

 

Rumsfeld stated:

 

Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.

 

 

 

 

[Luke 532]

Sessions confirmed moments ago.  :D

[TwoCitiesCapital]

That's very interesting. Thank you for pointing that out. I had read those docs but didn't recall seeing that.

 

Having read the offering circulars for Fannie Mae preferreds, I don't see how a forced conversion can happen at all.

 

FNMAS circular: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf

 

Page A-5, Section 3(d):

(d)

The  Series  S  Preferred  Stock  will  not  be  subject  to  any  mandatory  redemption,  sinking  fund  or  other  similar  provisions.  In  addition,  Holders  of  Series  S  Preferred  Stock  will  have  no  right  to  require redemption of any shares of Series S Preferred Stock.

 

Page A-6, Section 7(b) (partial):

(b)

Without the consent of the Holders of Series S Preferred Stock, Fannie Mae will have the right to amend, alter, supplement or repeal any terms of this Certificate or the Series S Preferred Stock (1) to  cure  any  ambiguity,  or  to  cure,  correct  or  supplement  any  provision  contained  in  this  Certificate  of  Designation that may be defective or

inconsistent with any other provision herein or (2) to make any other provision with respect to matters or questions arising with respect to the Series S Preferred Stock that is not  inconsistent  with  the  provisions  of  this  Certificate  of  Designation  so  long  as  such  action  does  not materially  and  adversely  affect  the  interests  of  the  Holders  of  Series  S  Preferred  Stock

 

It appears a forced conversion would be inconsistent with the first sentence in section 3(d). And we already know that the major preferred holders are willing to fight for their contractual rights in court, so a "we're going to do this anyway, see you in court" stance by the government is unlikely.

 

I think "mandatory" is the operating word. If it was put forth as an attractive option to convert (i.e. get 10 common vs not receiving dividends for years), and the preferred shares vote in favor of it, it's not "mandatory" and could still happen, right?

[SnarkyPuppy]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

[hardincap]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

 

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal

[Mephistopheles]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

 

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal

 

If that's your concnern, even if they rule on appeal, he can still settle any of the other cases and Ps ultimately make out great

[rros]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

The writing was on the wall for the entire Obama administration when he announced, as senator, he would be against vulture speculators buying the stock for pennies. He said this in an interview in reference to the collapse of the GSEs. Most of us disregarded his stance and were wrong for 8 years. This time, the Treasury Sec. nominee has announced privatization is the way to go, recapitalization is vital and an end to the conservatorship is needed. Some will also disregard this comment. To their regret, provided he is confirmed today or tomorrow.

[Williams406]

My biggest concern with respect to Fannie at this point: Squirrels! Distraction, that is. In fairness to the attention spans of the key players, I really mean some sort of urgent crisis that moves a Fannie resolution to the back burner, or making a resolution that is favorable to shareholders tough to pursue right now. Before the election I viewed any resolution as legal. Now I weight a political resolution as far and away the key resolution driver. And the stars certainly seem to have aligned powerfully on this front. Anything disrupting political resolution here hits preferreds and commons hard. We'd still have the legal backstop and possible resumption of political force to fix things but it would get ugly in the interim and the worst case scenario here is about as bad as it gets.

 

I'm in big and like the odds very much, and I'm really ready to see something put on the table finally for shareholders.

 

 

[SnarkyPuppy]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

 

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal

 

I hear you but I don't think this is really an issue anymore.  It wouldn't be good for the market prices in the short term, but ultimately there will remain the need for a resolution of the status quo and we know where the key players thoughts are...

[Flynnstone5]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

 

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal

 

Agree. How could they not rule for remand at the very least in light of new docs, but who ever thought Lamberth 1 would happen.

 

I think we see a stepped up timeline because everyone expects tax reform asap and they will need to handle GSE's first IMO.

[Guest cherzeca]

I continue to feel like I'm missing something here or not fully appreciating all of the potential downside events.  This is one of the higher confidence investments I've had and the upside (IRR) is still very high... I'm trying to remain rational and not overexpose myself but if this ultimately does work out, the writing was quite literally on the wall.

 

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal

 

Agree. How could they not rule for remand at the very least in light of new docs, but who ever thought Lamberth 1 would happen.

 

I think we see a stepped up timeline because everyone expects tax reform asap and they will need to handle GSE's first IMO.

 

imo things could go reasonably quickly after mnuchin is confirmed (looks like saturday morning).  tax reform needs to come up from house with ryan and house and means, and that will be slow.  mnuchin can start settlement talks with a conference call with Ps. now where that goes i dont know.

[Guest cherzeca]

last 10 days fnmas has outperformed fnma by about 20%.

 

anyone have a view why?