Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Nobody said bankruptcy and conservatorship are the same, what was said is that recapitalizations for them are virtually the same.

The government can do virtually whatever they want to do with a stroke of the pen since on paper not only are they owed the full amount of the SPS, they own 79.9% of the commons.

Did anyone read the warrant agreement? The government can assign some or all of the warrants...to new investors via a re-ipo for example. Therefore the government can assign all or part of them AND convert all or part of the SPS into commons and still maintain less than 79.9% ownership (or any percentage they need for a re-cap to make sense for new investors).

While we can all speculate what a re-cap will entail, you can bet a conversion will be offered to JPS so that amount won't have to be raised to meet capital requirements and certainly some new PS will be issued.

It's a very real danger that 79.9% dilution could turn into 95%. This is just reality.