Fannie Mae-No Politics (FNMA)

[LuLeVan]

Question for Kthomp19:

In what order could the swaps occur as part of the restructuring?

A: First the swap of JPS into common shares (increasing the number of commons from 1.8 to 9 billion). Then the swap of SPS into the combined amount of those 9 billion commons?

OR

B: First the swap of SPS into commons (dilution by a factor of 100, so there are subsequently around 200 billion common shares whose value falls sharply). Then the swap of JPS into those already heavily diluted commons at par value?

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I believe that (A) would dilute JPS significantly more than (B). JPS could end up being worth as little as $8, not $25.

Are there any legal arguments against (A), f. e. that JPS rank higher in the capital stack, which would prohibit (A) and leave (B) as the only valid option?