Fannie Mae (FNMA)

[kthomp19]

that said.. if the eventual ratio ends up being closer to 2:1 like moelisv2 might suggest if backdivs/interest are ignored then now would be an absolutely fabulous time to sell preferred and buy common.

How do you get 2:1? I thought the point of 3:1 in the original plan was that it was a premium to then-market prices, giving the pref holders an incentive to actually accept the conversion. What pref holder would take 2:1 now when they can get 5.5:1 (for FNMAS) in the market? Even the low-yields are around 4:1 now.

if the preferred settle for subpar, i'd expect this ratio to go over 10:1 though

I don't follow here. Why would settling for less than par mean a higher ratio?

also.. the breadth of the preferred.. fnmas/fmckj/fnmat are participating in this but the rest of them seem to be lagging / not much

The higher-yielding prefs are by far the most popular among the big-money pref holders. I could definitely see them shorting the common and buying more of those. If this actually is a "someone must know something" moment then the writing appears to be on the wall.