<<Why would they do that?>> re: Senior to common conversion vs. Warrant.
The simple answer is to get something for taxpayer benefit that allows the privatization to go forward. The warrants likely cripple any possibility of a successful IPO to build any significant amount of capital. FHFA wants a protective amount of capital for safety and soundness. Treasury wants "something" more than what it has gotten to date, but not so much as to kill the release and be stuck with a $200 B draw facility entering a possible recession.
You cannot IPO more common shares for capital at a higher price than the existing common shares are worth. If you call the warrants, the fully diluted factor evaporates and brings share price up. The elevation allows any IPO to go forward with a lot fewer, dilutive shares than an IPO at today's $1.70 value.
Market Data 
Markets 
AI
