Fannie Mae-No Politics (FNMA)

[FOFreddie]

Ackman is most likely right.

We should know this year which way the 5th Circuit will rule on voiding the NWS and SPS Liquidation pref. It then is up to SCOTUS. Bhatti and Rop are still in play also.

If the NWS is voided, then common dilution will be the function of sequencing the exercise of the warrants and any consensual conversion of the JPS into CET1. Public common could be less that 20 pct but not the wipe out that is in some of the CBO scenarios.

Maybe reasonable posters should wait until the 5th Circuit rules before making bold predictions of a wipe out cram down? . Could happen but Collins seems like we have a 9/16 likelihood that the 5th will set aside the NWS and SPS Liquidation Pref.