Fannie Mae-No Politics (FNMA)

[LuLeVan]

The Net Worth is $118 billion, but there is $312.5 billion worth of SPS LP outstanding that you advocate. So, only $118B SPS can be converted to common stock.

LOL. When Mnuchin and Calabria wanted to convert the liquidation preference (LP) into common stock in 2020, the net worth was much lower, probably around $50 billion.

The fact is that the net worth of the companies has nothing to do with converting the LP into commons. Back then, the LP was already worth more than the final market capitalization of the companies after recap/release. Therefore, Mnuchin would have had to take a haircut on the LP for the release. He offered the JPS holders that the JPS would be converted into commons along with the LP (at the same time), but demanded that the JPS holders agree to a haircut on the JPS equal to the haircut the government would have to take on the LP. The JPS holders rejected this offer in 2020.

This alone shows that the JPS holders cannot simply be "wiped out" as you claim without any valid evidence. Why else would Mnuchin have bothered to make this offer to JPS holders?