UPDATE: Pershing Square's Ackman Takes Larger Stakes in Fannie (FNMA), Freddie (FMCC)

March 31, 2014 10:16 AM EDT Send to a Friend
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(Updated - March 31, 2014 10:39 AM EDT)

Pershing Square's Bill Ackman is raising his stakes in Fannie Mae (OTCBB: FNMA) and Freddie Mac (OTCBB: FMCC), according to CNBC headlines.

More from the amended 13D on Fannie Mae:

On March 28, 2014, certain of the Reporting Persons entered into Swaps for the benefit of certain Pershing Square Funds. Under the terms of the Swaps, (i) certain of the Pershing Square Funds will be obligated to pay to the bank counterparty any negative price performance of the 15,434,715 notional number of shares of common stock subject to the Swaps as of the expiration date of such Swaps, plus interest rates set forth in the applicable contracts, and (ii) the bank counterparty will be obligated to pay certain of the Pershing Square Funds any positive price performance of the 15,434,715 notional number of shares of common stock subject to the Swaps as of the expiration date of the Swaps. During the term of the Swaps, cash will be paid by the bank counterparty to the relevant Pershing Square Fund in an amount equal to the amount of notional distributions or dividends paid by the Issuer in respect of such notional number of shares of common stock. All balances will be settled in cash. The Pershing Square Funds’ counterparties for the Swaps include entities related to UBS AG. The Swaps do not give the Reporting Persons direct or indirect voting, investment or dispositive control over any securities of the Issuer and do not require the counterparty thereto to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, the Reporting Persons disclaim any beneficial ownership of any shares of common stock of the Issuer that may be referenced in the swap contracts or common stock or other securities or financial instruments that may be held from time to time by any counterparty to the contracts.

And for Freddie Mac:

On March 28, 2014, certain of the Reporting Persons entered into Swaps for the benefit of certain Pershing Square Funds. Under the terms of the Swaps, (i) certain of the Pershing Square Funds will be obligated to pay to the bank counterparty any negative price performance of the 8,434,958 notional number of shares of common stock subject to the Swaps as of the expiration date of such Swaps, plus interest rates set forth in the applicable contracts, and (ii) the bank counterparty will be obligated to pay certain of the Pershing Square Funds any positive price performance of the 8,434,958 notional number of shares of common stock subject to the Swaps as of the expiration date of the Swaps. During the term of the Swaps, cash will be paid by the bank counterparty to the relevant Pershing Square Fund in an amount equal to the amount of notional distributions or dividends paid by the Issuer in respect of such notional number of shares of common stock. All balances will be settled in cash. The Pershing Square Funds’ counterparties for the Swaps include entities related to UBS AG. The Swaps do not give the Reporting Persons direct or indirect voting, investment or dispositive control over any securities of the Issuer and do not require the counterparty thereto to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, the Reporting Persons disclaim any beneficial ownership of any shares of common stock of the Issuer that may be referenced in the swap contracts or common stock or other securities or financial instruments that may be held from time to time by any counterparty to the contracts.


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Related Categories

13Ds, Hedge Funds, Trader Talk

Related Entities

William Ackman, UBS, Pershing Square Capital, Dividend, 13D, Definitive Agreement

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