warrants to buy/obtain equity at a given price - what obit calls CALL warrants - are solely in the ownership or equity arena of investment securities
how does a warrant to own/buy common stock protect you more than a Senior Preferred ?
In a CH11 or CH 17 I assume (and look to more knowing posters) that warrants hold a lower position in any waterfall than preferred stock and actual issued common stock.
Again - the logic that warrants were collateral or protection baffles me.
To me the warrants were the cost of doing business with the Treasury
--- "F and F if you want our money and 100% guarantee on all debt obligations then issue us preferred stock with 10% dividend and issue us the right to buy/own 79.9% of you or we will close you down" (not arguing right or wrong - but para parsing the deal)
As others have noted correctly, the GOV did not initially nationalize F and F. The warrants were the vehicle to put Treasury in position for 79.9% ownership of a future thriving F and F if such came to pass. (note - senior PREFERRED - as non common stock preferred equity - does not afford Treasury this treasure).
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