Free Cheat Sheet · Fannie & Freddie Preferred

The GSE Preferred Cheat Sheet

One page. The tickers, the par values, the recap thesis in 60 seconds, and the ways it goes to zero. Written by someone with 100% of his net worth in this trade — and a 1W–8L options record to prove he's not infallible.

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→The flagship tickers → series → par, decoded (FNMAH is Series P, not H)
→The recap thesis in 60 seconds — and the ways it goes to zero
→An email when I actually trade. No system, no upsell.

No spam, no PDF you'll never open. The resources unlock on the next screen; the emails come when I actually trade. 1W–8L on options — I'm not selling you a system.

The Thesis in 60 Seconds

If you read nothing else, read this. Four steps from “why is the dividend gone” to “why anyone is buying.”

The dividend got swept

In 2012 the Third Amendment to the conservatorship agreement (the “Net Worth Sweep”) sent essentially all Fannie & Freddie profits to Treasury, leaving nothing for the junior preferred. The shares stopped paying.

The preferred has a fixed claim

Each series has a stated liquidation preference (par) — $25 or $50 per share. The junior preferred sits ahead of the common in the capital stack. If the companies are recapitalized and exit conservatorship, that par claim is what bulls are buying.

It trades at a fraction of par

Because the dividend is suspended and the outcome is uncertain, the preferred trades well below par. The bet: in a recap, the par claim (or a negotiated conversion) is worth multiples of today's price.

The catalyst is legal + political

Litigation (the Fanniegate cases) and an eventual administrative release from conservatorship are the catalysts. There is no coupon clock — you wait, and the timing is out of your hands.

The Tickers You Actually Need

There are ~40 GSE preferred series. You only need a handful to understand the trade. The one rule: the ticker's last letter is not the series letter. Full decoder on the Preferred Ticker Map.

Ticker	Issuer	Series	Par
FNMAS	Fannie Mae	Series S	$25
FMCKJ	Freddie Mac	Series Z	$25
FNMAH	Fannie Mae	Series P	$25
FMCCS	Freddie Mac	Series S	$50

FNMAS — Fannie's most actively traded junior preferred — ~280M shares, 8.25% fixed-to-floating. The liquid one.

FMCKJ — Freddie's flagship — ~240M shares, $25 par. Ends in 'J' but the series is Z. The Freddie twin of FNMAS.

FNMAH — The trap: ends in 'H' but it is Series P. The real Series H ($50) trades as FNMAM. Get this wrong and your whole par math is wrong.

FMCCS — A liquid $50-par Freddie series — different par regime than the $25 FMCK- family. Par regime matters for upside math.

Par values in one breath

✓$25 par ≈ the 2006–2008 vintage (Fannie P/Q/R/S/T; Freddie U/V/W/X/Y/Z). The most liquid names live here.
✓$50 par ≈ the legacy 1996–2005 series. Same recap thesis, twice the par claim per share.
✗A $50 figure on a known $25 ticker (or vice-versa) means the series was misidentified. Confirm in the offering circular before you do par math.

The Ways It Goes to Zero

I lead with the losses on purpose. This is a high-variance bet, not a yield product. If any of these would ruin you, this isn't your trade.

!No dividend today. You are paid in patience and an uncertain catalyst, not yield.
!Wipeout risk. A receivership or a recap structured to favor common/Treasury could leave junior preferred with little or nothing.
!Timing is political. Courts and administrations move on their own schedule. “Soon” has meant years.
!Dilution. A capital raise to recapitalize the companies could dilute existing holders depending on terms.
!Liquidity. Most series are thin. Use limits; the bid/ask can be wide on the small series.
!Par confusion. Mixing up $25 vs $50 series (e.g. FNMAH vs the real Series H) corrupts your upside math before you even start.

Frequently Asked Questions

What is GSE preferred stock?

GSE preferred stock is the junior preferred shares issued by Fannie Mae (FNMA) and Freddie Mac (FMCC) — the two Government-Sponsored Enterprises that backstop the U.S. mortgage market. The shares have a fixed liquidation preference (par) of $25 or $50 per series and sit ahead of the common stock in the capital structure. Their dividends were suspended in 2012 under the conservatorship Net Worth Sweep, so today they trade as a recapitalization bet, not a yield instrument.

Why don't the GSE preferred tickers match their series letters?

When Fannie and Freddie were delisted from the NYSE and moved to the OTC market around 2008–2010, each series got a new five-letter ticker whose trailing letter was assigned sequentially — it does not encode the series. So FNMAH is Series P (not H), and FMCKJ is Series Z (not J). The full decoder table is on the Preferred Ticker Map page.

What is the GSE recap thesis in one sentence?

If Fannie and Freddie are recapitalized and released from conservatorship, the junior preferred's fixed par claim (or a negotiated conversion) is worth far more than today's depressed price — so you buy par-claim dollars for cents and wait for the legal and political catalyst.

How can GSE preferred go to zero?

Several ways: a receivership that wipes the junior stack, a recapitalization structured to favor Treasury and common at the preferred's expense, an adverse final court outcome, or a capital raise on terms that dilute existing holders. There is no dividend cushioning the wait. This is a high-variance, binary-ish bet — size it accordingly.

How much of your net worth is in GSE preferred?

Roughly all of it — 100% of my net worth is in GSE preferred. I document the positions and every trade publicly, including the losses (1W–8L on options). That's a disclosure of my bias, not a recommendation. I'm not a financial advisor, and a concentrated bet like this is not appropriate for most people.

Which GSE preferred should a beginner look at first?

The most liquid series are the place to understand the mechanics first — FNMAS (Fannie Series S) and FMCKJ (Freddie Series Z). They trade more, so the bid/ask is tighter. But “most liquid” is not “best” or “safe” — confirm par and terms in each series' offering circular before doing anything, and read the risks on this page.

Not advice. A disclosure of bias.

This page is an educational orientation, not investment advice. Glen Bradford is not a financial advisor and holds significant, concentrated positions in GSE preferred stock — roughly 100% of net worth. That is a conflict of interest, stated plainly. Data is compiled from public sources and personal tracking and may contain errors. Confirm any security in its own offering circular and consult a qualified professional before trading.

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You've read the orientation. If you want to be on the list when I buy, trim, or get blown up, drop your email — the resources are one click away.

→The real ticker → series → par map (FNMAH is Series P, not H)
→The recap thesis in plain English — and the ways it goes to zero
→An email when I add, trim, or get blown up

No spam, no PDF you'll never open. The resources unlock on the next screen; the emails come when I actually trade. 1W–8L on options — I'm not selling you a system.

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