Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Any lowering of the liquidation preference will either need to be a voluntary writedown by Treasury or a conversion to common due to how the ERCF is structured.

I can envision Treasury waiving the LP above the original $187B without any legal issues, but waiving the $187B? No way. I'd expect Treasury to convert the $187 into commons and if they weren't made whole, they could receive new warrants to plug that hole if Treasury, and by extension the Department of Justice, perceives a write down as illegal.