Mr Cooper Group Inc (COOP)

[kaliaphantom]

the Gameplay

SG can play this game in so many ways. Here is an opinion.

SN's are really stuck. They have primarily 4 major options.

A. Give up everything. This means outright abandoned from the GSA. This puts the GSA partially broken as one major party is out. And a partial GSA means ground for re-engineering with EC as a primary negotiator.

B. JAIL. This means JAIL. Cannot get any simpler. In addition this also means option A.

C. Negotiate with the EC. Now we should note that EC were 99% close to signing term sheets but sudden objection from TPS flipped coins all over the place. TPS will not let go AND SN's do not have much money to fulfill both TPS and EC and themselves. So here they really cannot save themselves without getting money into the waterfall. This option is highly unlikely. SN's need pocket fillers (you guessed it right - JPM and FDIC) and this is opinion D.

D. Join the band wagon with EC, TPS, ANICO to fight against JPM and FDIC. Based on past history we can be certain that JPM has the dirt on the SN's. But at the same time SN's have the dirt on JPM. They negotiated with JPM/FDIC in the GSA based on the leverage that the SN's had on JPM/FDIC. Both will have to bend towards EC because we are clean in this whole thing. This option is really what will stem the settlement. Some say that it will take a lot of time for negotiations. But note that it will cost JPM interest on the deposits EACH MONTH which I think is $40 million. And the pressure of this IT allegations itself cannot sit dormant for long.

If option D is the road way then I could see:
- JPM settling 4B deposit WITH interest
- JPM settling TPS seperately
- JPM & FDIC letting go of tax benefits amounting over 2.5B
- JPM & FDIC negotiating releases with EC. This means no future litigation against these two entities. They better be worth the dough.
- EC gets newCo with NOL upto 5.5B. The newCo valuation is still a mystery to me.
The above could be the bare minimum.

I would simply suggest JPM to work with FDIC and settle this case once for all with a 1:1 common swap. Pref are made full. Now its only a suggestion :)



Any thoughts ...