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Re: Rodney5 post# 756467

Thursday, 06/01/2023 4:11:18 PM

Thursday, June 01, 2023 4:11:18 PM

Post# of 814184
Whoever this poster is needs to reread that section of the book. He totally misunderstood the section discussing this. Mnuchins position was that he didnt want to be junior to anyone (this means he didnt want to convert snr pfds to common and leave jr pfds intact as now they would become the senior security above UST), and at the very minimum UST would have to be on equal footing as other holders. Calabria claimed Mnuchins only acceptable solution to this dilemma was that he would be ok with both the Snr pfd and Jr pfd converting to common shares together, so they would be equal and treasury wouldnt be below anyone. So whatever % recovery snr pfds received, jr pfds would receive equal. While common gets crammed down. This is the plan both UST and FHFA were ok with.

UST also told FHFA they didnt believe they could write down the senior pfd balance bc of legal reasons and due to political optics even if they could do it.