Fannie Mae-No Politics (FNMA)

[Possum336]

You are correct the preferred shares will not be converted. But you assumption that all monies are common is incorrect the preferred will have to be fully compensated before the common as well as the government warrants will see a dime. No smoke just a fact of the hierarchy of securities. Preferred securities are senior equity( unless you are talking trust preferred and then they are junior unsecured debt) In this case investors give up voting rights for guaranteed income and fixed value. Even in liquidation the preferred is senior to common although that is not really an issue here. But make no mistake the JPS are senior to the common stocks in every way and this will be proven as the cases progress