Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Are warrants really "pari-passu" with common stock?

The warrants are an agreement between treasury and the gses but they have not been exercised. So in a bankruptcy is it really true that an agreement that has not been exercised ranks on the same footing as established common shares?


I don't know but I would say the warrants would be in a different liquidation class than the common shares.


But I do know that you are wrong that a US trustee is required to be a party in a bankruptcy proceeding.

These warrants are. You should have stopped at 'I don't know'.

Looking at it differently, warrants are just common shares that haven't been issued yet. (In other words, they are the same thing in different states). We all know these warrants will be exercised because the strike price is virtually zero so it's not like they will expire unexercised. So you may as well look at it like the shares have already been issued.

I've been dealing with bankruptcies since before the GSEs went into conservatorship. You try to frame something that I never said to dig yourself out of a previous hole; "But I do know that you are wrong that a trustee...".

You said that bankruptcy judges appoint creditors committees. You were wrong. I cited the statute. I'm not going to do it again. But you need to learn bankruptcy basics before having a conversation about bankruptcies if that's what you want to do.