Fannie Mae-No Politics (FNMA)

[kthomp19]

why a conversion is preferable

1) SPO investors want there to be a conversion so there is less liquidation and dividend preference in front of their newly-issued commons.
2) Junior pref holders want it because it makes more money for them.
3) FHFA doesn't care either way, but it could help settle the lawsuits.

On the other hand, there is no real reason for there not to be a conversion. Treasury showed, with its Citi warrants, that it is willing to let a pref conversion dilute its warrant stake.

nobody is asking for it

Not publicly, but that doesn't mean nobody is asking for it behind closed doors.

why a negative to common conversion rate

What does this even mean?

would be legally justified

A conversion is fully, 100% legal. To even attempt to prove this wrong you will have to cite a section of the law.