Fannie Mae (FNMA)

[Fully Diluted]

Hey kthomp19,

the so beloved Moelis plan converts the JPS into commons at the IPO price. There is no doubt about it. Here comes the explanation:

Although Moelis writes - and you will love it - that you can do it differently, both calculations assume a conversion of 50% of all $33,2B JPS:
"Assumes pro forma preferred stock balance of $42 billion based on $25 billion of new issuance plus, for illustrative purposes only, $17 billion of outstanding legacy junior preferred stock (pro forma for an illustrative 50% equitization)".
Page 18

Now you can go through the numbers and see if they fit.
See example 1 on page 37:
IPO Price: $10.87
shares outstanding: 14,788
...results in market capitalization: $160,75B
equitized JPS: 10% "Relative Ownership"

50% JPS = $16.6B
$16.6B / $160.75B = 0.103 = 10%
fits!

On the same page it is written that "... the equitizing portion of junior preferred stock then receive approximately ... 1.5 billion shares":
1.5B X $10.87 = $16.31B
fits, too, due to rounding!

The same applies to example 2 on the next page. You are welcome to recalculate this.

You can also read the following in the Moelis plan on the same pages:
"At the IPO date, Treasury and the equitizing portion of junior preferred stock then receive approximately 0.6 billion and 1.5 billion shares, respectively, based on the IPO price and equitized balance then outstanding."

I could've saved myself the math.

GLTY