FMCKJ

FMCKJ is the Series K preferred stock of Freddie Mac, Fannie Mae's smaller counterpart in the government-sponsored mortgage market. Like all GSE preferred shares, FMCKJ's dividends have been suspended since the 2008 conservatorship, and the stock trades as a bet on the eventual resolution of the GSE housing finance reform.

Freddie Mac's Series K is notable for its $50 par value, which creates a different risk/reward profile than the $25 par Fannie Mae preferreds. If recap and release occurs at par, FMCKJ holders stand to receive $50 per share — a significant multiple of recent trading prices. The stock is also notable because its coupon rate makes it one of the more valuable Freddie Mac preferred series if dividends are ever reinstated.

The legal and political dynamics are essentially identical to Fannie Mae: conservatorship, the net worth sweep, litigation, and the ongoing debate about housing finance reform all affect FMCKJ in the same ways they affect FNMAS. The two trades are highly correlated, but differences in par value and coupon create different entry points for investors.