Washington Mutual Preferred fka WAMPQ

[Mehdi]

Valuation - here we go. Feel free to add/correct/comment, as I have computed the numbers to the best of my knowledge - not an expert, but trying to contribute to this forum.

Looking at the last MOR, Assets are $6.9B and liabilities are $8.3B

http://www.sec.gov/Archives/edgar/data/933136/000090951810000136/mm02-2610_8ke991mor.htm

Global Agreement Valuation:
Let's use the numbers from the proposed agreement:
WMI will get the $4B deposit, which is already included in the MOR under assets.
WMI will get an additional $1.95B from tax refunds (30% of $3B plus 40.4% of $2.6B)
Cayman ($3.9B) will be "handled" by JPM so won't impact A/L.
WAHUQ, Trust Preferred amounting $765,674,200, are defined as Junior Subordinated Debentures, and appear on the MOR - my understanding is that they would remain WMI liabilities and would not be transferred to JPM.

This agreement would put the Assets at $8.85B.

Therefore in this case, there would be $8.85B-$8.3B = $550,000,000 in excess.

Preferred (K+P) are $3.5B => $550M / $3.5B = 15.7% recovery or $157 for the Ps and $3.9 for the Ks.

Some other items were covered in the agreement, such as +$50M for the Visa shares, +$55M for American Savings, Wind Power -$20M. I don't know how to account for these, as they may have been included in the asset section of the MOR already. But for the sake of arguments, let's say they could potentially account for maximum +2.4% of face value (50+55-20 divided by 3.5B)

Intercompany Loans in the amount of $179M would be payed to WMI by JPMC, forgiving all other intercompany claims. I believe these $179M are already accounted for in the item Investment in Subsidiaries (see Note 3 in the MOR).
Now the mention "forgiving all other intercompany claims" could be an interesting one as if, once again, you look in the MOR, there is a line item called Intercompany payables in the Liabilities section, for an amount of $684,095,259. Zeroing this one out, would add an additional $684M in excess, $1.234B total ($550M + $684M) / $3.5B = ~35% recovery or $350 for the Ps and $8.75 for the Ks. But eh, could be wrong here - so any feedback/comment is welcome!

Big question mark on the BKK (or DKK?) litigation - 7 claims against the estate - JPMC would assume all liabilities associated to that litigation. Anyone has an idea of how much these liabilities are for ?

Last thing, can't find any DD on - quoting Rosen - "the rebate tax associated with the post petition period that JPMC has not cashed to the extend that WMI has cashed these". Anyone has an idea of the amount ? It would be payed to JPMC by WMI.

Today's valuation (without Global Agreement)
Now let's say Global Agreement not in place...we know that WMI has received $3B in tax refund and is waiting for another $2.6B. Put the $4B in the deposit on top of that, the next MOR could likely show $12.3B in assets, to compare to the $8.3B in liabilities listed in the last MOR.
Now that's something...$4B in excess => Full face value for Ps and Ks and $500M remaining for either commons (that is 29 cents per share - but I doubt the EC would accept) or payment of passed dividends (~380M) and ~120M to go to trial in order to recover as much as they can for the commons.