Fannie Mae-No Politics (FNMA)

[rosen62]

Thank you, Obit. You are always generous with your time and always very patient.

A minimum participation threshold for owners of Preferred Stock
would be set to ensure success.

So here is another inference. When Berkowitz speaks of restricted capital at 34+ bill and new capital infusion at 17+bill he assumes a 100% participation of Jrs. Yet, in writing, he speaks of a "minimum threshold". So in reality, he is not sure and the 100% numbers are just "an aspirational goal", and an optimistic one. Not regarding the rights but regarding how many Jrs. will opt to convert into common. The rights will likely be exercised in their totality as those who get them and decide not to take the offer (and pony up cash) will sell them in the open market to those who want. Although a few participants may forget about this and have their rights expire worthless (there is always someone). Otherwise, hedge funds will simply swallow them.

Another interpretation could be that the whole universe of preferreds participate mandatorily due to 2/3rds of a vote. But then, why would he speak of a minimum threshold?