Fannie Mae (FNMA)

[kthomp19]

I sense unfamiliarity with the investment banking process by which new shares are offered. Each of the banks I listed are among the largest on a global basis. In the case of Goldman Sachs or Morgan Stanley, preferred shares serve no core capital exigency.

Are you saying that the underwriters of the re-IPO will hold on to some of the commons? I understand that they would have some agreement to buy what they cannot sell, but if they do their homework this shouldn't be much of a burden.

For commercial banks that serve both investment and mortgage banking clients, the P shares are crucial to thier capital which is regulated under FDIC rules.

I fully agree here. These banks were among the most-screwed parties of 2008.

I agree that a full subscription on common-derived capital would likely require a dividend emolument. But it all hinges on the share pool and dilution impact.

And naturally, such a dividend emolument means the juniors would get their divs turned back on too.