Some of the high yielding preferreds could be paid off and retired but I don't see how it makes sense to retire the variable low yielding benchmark preferreds in a low interest rate environment, ceteris paribus.
Redeeming the prefs makes the least sense of all the options FHFA has. Converting them instead saves FnF $33B in capital, as does just leaving them alone.
The conversion makes the SPO easier to conduct, so it makes more sense than the leave-as-is option.
Why should Prefs-Debts-Buys from after Sept. 5, 2008 be paid-off, if they Legally simply can been eliminated at such Capital Insufficient Insolvency Companies ( Therefore usually get eliminated. ) ?
To get replaced by New-Prefs to buy at normal Par-Values !
It also explains, Why there will be No Conversions.