Fannie Mae-No Politics (FNMA)

[DaJester]

85% chance the seniors are converted (in which case the warrants don't matter), and 15% chance the seniors are written down (in which case I think there is a 100% chance of the warrants being exercised). This isn't that hard.

What I'm hearing you say is:

- 85% chance the seniors are converted to common, and they will take between 90-95% equity
- 15% chance the seniors are not converted, in which case they will use warrants to take 80% equity
- 0% chance that something other than these two scenarios happen

You are giving 100% probability to an 80-95% window. No new/revised senior agreements based on future dividends or commitment fees, no partial exercising of warrants, no partial conversion or write-down to take a lower percentage than 90, just 2 scenarios and that's it.

Regardless of scenario 1 or 2, you just need to state a % chance that JPS will get 90%+ of par, and then we can sticky this to see how accurate you are.

In a continuous probability distribution the probability that the random variable takes any specific value is zero, but the probability it takes a value in an interval can be positive and computable.

This isn't a random variable. Nobody is going to spin a wheel to determine how much equity the Treasury decides to steal. This will be a directive and decided by half a dozen people, or maybe less.