Replies to post #603539 on Fannie Mae-No Politics (FNMA)

[YanksGhost]

I would agree with your reasoning if the possibility of recession wasn't rearing its ugly head. No way to predict this with any certainty, either way.

If the economic shutdown continues longer than 75 days, much business will not survive or ever reopen. The safety in LP could become a game changer, IMO. Remember that the strictest remediation in Wuhan lasted 79 days and is a very slow and structured recovery.

[RumplePigSkin]

nats - I have yet to see a compelling pov that points to a conversion at extremely favorable levels at the expense of common shareholders. The capital structure argument has the most likely impact for distressed companies. Covid19 notwithstanding, I don’t see how a conversion happens so quickly prior to GSE future clarification for the investment community.

Of the 4, 5, or 6 main items that need to be resolved, I would not put JPS conversion in the top 3 or 4. Meaning resolution on the first 3 items, even if attempted to be executed privately, will undoubtedly leak to the public as the items to be resolved require too many parties and are too large to be kept private.

This “big bang” theory is predicated on secrecy. With “insiders” all over these companies, I doubt it will be kept under wraps.

And then, if recap is to be done by the companies, I think everything will be equitably done without favoring capital structures of healthy companies.

[curious999]

you are really confused- nomura assumes 100% jps converts @ offering price of common

[Guido2]

nats1 - Has any litigant asked for conversion?

The defendants in the court cases aren't the common shareholders, but the U.S.government. The commons did not deprive the preferred shareholders from dividends they should have received during the "golden age of profits". It was the U.S.government.

Why should common shareholders accept conversion?

I hold both common and preferred. I want nothing for my preferred other than restoration of dividends and, possibly, back dividends if courts decide that without the swindle the corporations were already capitalized.