Replies to post #597258 on Fannie Mae-No Politics (FNMA)

[FFFacts]

Here is a link showing the exchange factors for each series.

I see through the sec document that the conversion terms of the preferred securities were converted at less than liquidation value but the conversion terms were more advantageous in relation the then market price of the securities.

Yes. That means the converted prefs made out quite well indeed, i.e. greater than par.

Initially, no, after yes. However, there is no guarantee of the market moving in the same manner as in citi, it could move opposite.

Both of these arguments of mine are backed by the Citi conversion, which was done at near-par and at a different ratio for the lower-dividend Series T.

Yes, but with fnmas at 12 to 1 there is seemingly no basis to arrive at that number over for example fnmah which has a stated yield of 300 basis points less.

The list certainly does have to do with the value of a common share; what that is not on that list could be considered a source of value?

A definition of value -the monetary worth of something. https://www.merriam-webster.com/dictionary/value What is the value of those variables and how is it measured?

My question has nothing to do with the probability of there ever being a liquidation. Therefore I ask again: do you agree or disagree with the statement "common shares have more value if, with all else being equal, there is less liquidation and dividend preference in front of them"?

In general I agree, however, the discussion was in the context of the the gses and its current situation, in this context, I disagree.

[investor G]

Kthomp, the citi conversion if you study closely is apples / oranges. Financially the govt was not diluted by a generous pref/common exchange ratio like they would here with the warrants in a potential exchange. As you said in a prior post, there's very little chance the warrants wouldn't be exercised in advance or in conjunction with an jr pref exchange offer rather than after.

[ano]

Don’t forget to mention your thesis is based on a total loss in Seila and Fairholme case and not preferable for pref plaintiffs demands filed