Fannie Mae-No Politics (FNMA)

[tcj]

I still think they take advantage of warrants, although I hope they don't. When you come up with $12 pps if warrants are exercised, is that at the existing strike or did you raise the exercise price?

I'm trying to come up with a pps under assumptions that excess NWS gets applied to original deal so a senior prfd balance of $10 billion, $30 billion on outstanding jr's and a capital requirement of $70 billion. Allow 2 years for recap, combined new issuance of prfd and common or incentive to convert with a delay on divs for a period. Not sure what would be realistic for new issuance and also what the "right" new strike would be.

Maybe it turns out to be a much better deal, but I'm interested in coming up with a pps based on this methodology where the admin looks to alleviate majority of suits and get a win for gov. I think this is a great place to start in finding a base pps.