Debt and Cash, are different things, and can be used for different things. Especially if one is Inside BK, and one is Outside of BK.
Original WMI P Preferreds were/are debt vehicles to drum up cash flow, backed by specific mortgage securities as collatoral. like renting out a house, with a senior note against it, where income is reduced by the cost of the debt note.
The original P Preferred trust assets were not segregated out of BK, so I'd think those debt assets could be used by the debtor however and whenever they chose. And my contention is the did use it temporarily for new WMI A&B Preferreds as operating money until an aggressive income generating Merger/Acquisition was consummated.
Which is different from original legacy Commons and just pure interests in securitized income streams from WMI Capital Trusts and their specific mortgage security collatoral. Pure cash flow, no debt assigned against these Trusts as senior collatoral....like renting out a house you own free and clear. pure profit.
The debtor couldn't touch this cash, as it WAS segregated out of the reach of Bankruptcy.
So:
I'm thinking WMI/WMIH/COOP could use this raised debt backed by mortgage trusts (old P Preferred) for whatever the heck purpose and use it how they please (aka hence my wondering if A&B Preferred were temporarily paid back with P Preferred debt interests until paid off). I'd think there is still plenty left going forward for P Preferred interests.
And all that is guaranteed to original legacy holders of P 'debt' is Face + interest. So going forward since Sept 2008, this trust backed debt might've generated 2 Xs FACE or something. I'm wondering if the 'Cream' above and beyond what is owed to legacy P holders (Face + interest),...if that 'Cream' (retroactive) is equal to what was guaranteed to A&B Preferreds. If so this lends credence to my theory.
