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  "documentTitle": "Fannie Mae & Freddie Mac (FNMA / FMCC)",
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  "notes": "The slide argues for modifying the Senior Preferred Stock Purchase Agreements (PSPAs) to act as a backstop, detailing the financial commitment and the need for modified terms to allow for private capital raises.",
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      "kind": "callout",
      "text": "The existing PSPAs should be modified to act as a government backstop, providing the same benefits as an explicit guarantee without the negative consequences",
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      "text": "Terms of the Senior Preferred Stock would need to be modified\nPrivate capital raise is not feasible if Treasury can purchase a senior security with onerous terms at any time, which the GSEs have no ability to repay",
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      "text": "Treasury’s total funding commitment under the PSPAs is $445bn(1)\nWe believe the full $445bn would be available for future draws if the Senior Preferred Stock is deemed repaid",
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      "text": "The size of Treasury’s funding commitment makes it akin to an explicit guarantee from the perspective of an MBS investor\nAdditional ~5.5% of GSE assets & guarantees after 2.5% first-loss private capital",
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      "text": "Treasury would be paid a commitment fee in exchange for this support\nPriced as super-senior reinsurance that would only be drawn upon in the unlikely event the GSEs’ private capital is fully exhausted in a catastrophic financial crisis",
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      "text": "(1) Consists of total draws of $119.8bn at Fannie and $71.6bn at Freddie, and remaining funding of $113.9bn at Fannie and $140.2bn at Freddie per public filings.",
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      "text": "Clarify Nature of Government Backstop (Cont.)",
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