Fannie Mae-No Politics (FNMA)

[kthomp19]

Step Two: Keep the SPS in place and require FNF to sell common, convertible preferred, new JPS and possible COCO debt to redeem SPS equal to $ 100 bn

I can't see there being any investor appetite for any of those things while the seniors exist, even if only partially.

Step Three: As sales proceeds come in and SPS redeemed pay off $ 100 bn settlement

If the money goes towards paying off the seniors, it won't recap FnF. And vice versa.

Step Four: Exercise warrants and sell shares

Net effect - 0 cash outlay, Capital levels are reached with the SPS remaining in place until redeemed and UST makes money of its 80% warrant stake.

I don't see a scenario in which Treasury monetizes neither the seniors nor warrants, but I also don't see one in which they monetize both.

If they monetize the warrants it's because the seniors were extinguished, and if they monetize the seniors then they would get so many commons that the warrants would be superfluous.