Replies to post #616693 on Fannie Mae-No Politics (FNMA)

[ano]

Preferred and Commons would not settle in the Washington federal case or if the 6th CFC question is unresolved, this is the crux, was or wasn’t it legal to act not in the best interest of shareholders, according to 46 lawsuits it wasn’t and according to FHFA/FHFA-C it was

6) “Whether plaintiffs’ allegations that the FHFA entered into an implied-in-fact contract with the Enterprises to operate the conservatorships for shareholder benefit fail as a matter of law.”

treasury is never going to send $125B to fnf

[kthomp19]

treasury is never going to send $125B to fnf

Even if Treasury converts the seniors to common, sells them, and pledges to send $125B of the proceeds to FnF? In that scenario Treasury never has a cash outflow, and can potentially make even more than they would off the warrants.

the srs will be written down.

That's certainly cleaner than the senior cramdown, but it requires the plaintiffs for every lawsuit to agree to settle. The cramdown plus payment moots all the lawsuits entirely (other than WF), no need for negotiation.

[Commons_Cancelled]

The SPS Cramdown Plan might be the cleanest, fastest, and easiest way to recap the GSEs.

Especially if SCOTUS (Seila) rules FHFA Director Calabria is removable, then I don't see how we don't get a Sr. Preferred Cramdown Recap if Biden wins in November.

FNMA will absolutely get its knees cut off in this scenario, but that's the risk of investing in Common shares.

Even with Consent Decree, Biden may impose additional requirements which may make Recapitalization complicated, maybe even impossible.

SPS Cramdown makes the most sense and Morgan Stanley & JP Morgan will likely push for this since it's quick and easy. They want their pay day sooner rather than later!