I agree. I think there will be a (minor) haircut for preferreds.
But, because preferreds are that, preferreds, I don't think it will be big.
Current Preferreds :
TPS $4 billion
WAMPQ $3 billion
WAMKQ $500 million
TOTAL preferreds FV = $7.5 billion
If (for example) a 200:1 (WAMUQ:WAMPQ) conversion rate applied:
2.7 billion WAMUQ would get converted to 13.5 million WAMPQ
It would be necessary $13.5 billion to pay commons
It means, (with a 1:200 ratio) that for any $ recovery for preferreds it would take almost $2 for commons, and that doesn't make any sense (preferreds are preferreds and should get more than commons in the waterfall).
With a 1:400 ratio commons would get almost the same amount as preferreds, which I also doubt could be possible.
Thus, I think IF there is any haircut it will be with a 1:800 or 1:1000 conversion. It means preferreds would get a 33% haircut, what is an important haircut...
