Update: Treasury Will Have Ownership Rights To 79.9% of Freddie and Fannie

As part of its announced bailout, the Treasury also said its senior preferred stock purchase agreement includes an upfront $1 billion issuance of senior preferred stock with a 10% coupon from both Freddie and Fannie, quarterly dividend payments, warrants representing an ownership stake of 79.9% in each firm going forward, and a quarterly fee starting in 2010.

With the government  getting 79.9% of  Fannie and Freddie for $1 billion, the  initial valuation for the 20% remaining for current comment stockholders will be $250 million, or approximately 25 cents per share for Fannie shareholders and approximately 39 cents per share for Freddie shareholders. And, its likely the Fannie and Freddie will need further capital injections, which means even more dilution.