Well, no. Preferred's have "no" advantage "except":
1. In the case of bankruptcy, they have priority.
2. They get first shot at dividends "but only" in the current quarter..preferreds are "non cumulative preferreds" which means they do not have "dibs" over back dividends.
Number 1 does not apply: FANNIE is profitable and profitable companies dont file bankruptcy.
Number 2 means that, because they are non cumulative preferreds, commons could get settlement funds ahead of the preferreds, and THAT is the real reason why preferreds want "to convert to commons".
Otherwise, why would they want to convert to commons? Would they want to convert to stock which was less valuable than what they now have???? No one would want to "convert" 20 dollar bills into 5 dollar bills.
Preferreds want a "favorable conversion" at the expense of commons, but none can explain how or why that would happen other than simply preferreds unwarranted optimism. In other words, preferreds expect someone will somehow give them 10 Five dollar bills for each 20 dollar bill with their unwarranted optisim.
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