Fannie Mae (FNMA)

[kthomp19]

They could convert seniors into warrants; seniors into common shares; assign warrants, current and future; receive warrants with valuation triggers, date triggers....

To me that's the most elegant solution if Treasury decides they want to monetize the seniors.

They would need to give up their existing "magic" warrants that give them 79.9% of the total share count, but giving up the seniors and existing warrants in exchange for super-warrants that are partially assignable and have a specific share count (much greater than 7.2B) is a great way to avoid Treasury ever owning even a single common share while getting all the benefits.

This method also allows FnF to write up the huge accumulated deficit on the balance sheet rather than having to move the senior pref stock balance into common stock. Both have the same effect on all forms of regulatory capital but being able to get rid of that huge accumulated deficit would make the balance sheet much cleaner.