Fannie Mae (FNMA)

[kthomp19]

No one has said chapter 11. Calabria insinuated, long ago, it may resemble a restructure. He's gone, irrelevant and his opinion counts for squat cause he was fired.

Mark Calabria was the FHFA director, and more importantly he helped write HERA. Who out there would be a greater authority on how conservatorships work? Both in how they should work (as Calabria understood the term while helping write HERA) and how they do work (as the actual conservator of FnF).

If his opinion is irrelevant then nobody's opinion is relevant. His politically-motivated firing doesn't change the appropriateness or veracity of his statements at all.

Please post one article that quotes anyone (FHFA , treasury, congress, or Senate) saying this is a chapter 11 reorg.

I already did, but here's another link to the podcast in case you misplaced it. Start at 20:10.

But here's another source you might actually pay attention to: Bill Ackman. In Pershing Square's 2017 annual report (page 15), Ackman said one of the reasons he bought preferred shares is that "it hedges our risk of a restructuring that disproportionately benefits the preferred versus the common shares".

That means Bill Ackman fully acknowledges that the juniors could "disproportionately benefit...versus the common shares" in a restructuring, which is exactly what happens in an exit from Chapter 11. That quote also includes a tacit acknowledgement by Ackman that he won't be able to do anything about that disproportionate benefit.

You are far too focused on the phrase "Chapter 11". That's not what you should fear: instead you should be afraid of the restructuring of FnF's capital structure. That is where massive dilution kicks in, and Bill Ackman himself acknowledged it in both words (the quote above) and actions (buying enough prefs to comprise 38% of his FnF portfolio).

Trying to brush this off as fear-mongering isn't going to do you any good. Bill Ackman, supposed hero of FnF common shareholders, is afraid of a restructuring and you should be too.



By my count that's "this is a restructuring" 2, "this isn't a restructuring" 0. Your turn: what sources do you have that say FnF's exit from conservatorship won't be a restructuring (which companies that exit from Chapter 11 go through)?