Mr Cooper Group Inc (COOP)

[ptolomeo]

About the P/Ks versus Us conversion.

I agree and think there will be a (minor) haircut for preferreds.

However, because preferreds are that, preferreds, I don't think it will benefit commons at all.

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 is 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 due to the priority rule).

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 also an important haircut...

So, I think commons will see something (because of that there will be a haircut for prefs) but, because of priority rules I don't see how commons can reach more money than preferreds, I even doubt they get the same quantity.

All IMHO.