Elaborating on the second point: issuing new non-cumulative prefs without converting the juniors would make the CET1 and Tier 1 capital amounts diverge even further, so Fannie would hit the Tier 1 goal while falling short on CET1. Thus capital raises will have to be 100% common shares unless the juniors are converted
You may see it as a minor point, but wouldn't it be more accurate to say capital raises would have to be a combination of retained earnings and common shares? I know this gets into debates about opinions related to timing, which I'm not interested in debating. I'm just asking for clarity in capital structure. Retained earnings go into CET1, correct?
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