Fannie Mae-No Politics (FNMA)

[FOFreddie]

I am assuming that new JPS could be issued with 3 to 4% so they would want to call the JPS anyway. New CET1 equity is needed and an conversion would provide the needed Tier 1 equity and lower the coupon for the JPS part of the new capital structure. They could just redeem high yielding JPS and issue new common also but JPS would probably negotiate for a conversion option.

Kelly has an extremely good fact pattern so we will see about the Statute of Limitations. Dont know how old he is but he may want to settle for a Derivative judgement and some direct settlement which could just be attributable to him and Washington Federal. The UST has a lot of gain and power to be creative but we all are running out of time to get things resolved - although if you are right potentially gigantic upside for common and that is why I own common and JPS. Definitely is looking to buy more common but it is hard to see the relative value vs JPS at these levels. At some point the optionality of the common is just to compelling to ignore but if Glen thinks it is $ 3 it makes it more difficult to by common .