WASHINGTON, Jan. 26 /PRNewswire-FirstCall/ -- Fannie Mae today reported in a filing with the Securities and Exchange Commission that in conjunction with preparing its financial statements for the fourth quarter of 2008 and the year ended December 31, 2008, and based on preliminary unaudited information concerning its results for these periods, management currently expects that the Federal Housing Finance Agency, acting in its capacity as Conservator of Fannie Mae, will submit a request to the U.S. Department of the Treasury to draw funds on behalf of the company. The draw will be requested under the $100 billion Senior Preferred Stock Purchase Agreement entered into in September between Treasury and the Conservator, acting on behalf of Fannie Mae.
Although management currently estimates that the amount of this draw will be approximately $11 billion to $16 billion, the actual amount of the draw may differ materially from this estimate because Fannie Mae is still working through its process of preparing and finalizing the financial statements noted above.
The estimate of the amount of the draw expected to be requested by the Conservator reflects management's current estimate of the effect that the company's anticipated net loss (primarily as a result of credit expenses and fair value losses during the fourth quarter of 2008), as well as other items, would have on Fannie Mae's net worth as of the end of the fourth quarter of 2008. The Conservator has not previously requested any funds on behalf of Fannie Mae under the Purchase Agreement and, as of the current date, Fannie Mae has not received any cash proceeds from Treasury.
This press release includes forward-looking statements, including statements relating to our expected net worth and financial condition as of December 31, 2008, our anticipated financial results for 2008, and the factors contributing to both; the amount of the initial draw expected to be made under the Purchase Agreement on behalf of Fannie Mae; Fannie Mae's future net worth and financial performance; and the expectation of additional draws on behalf of Fannie Mae. Risks that may cause Fannie Mae's future results to differ materially from these statements include, among others, those contained in the "Risk Factors" section of Fannie Mae's Form 10-Q for the quarter ended September 30, 2008.
