Regrettably, I also agree that this isn’t neutral to the preferreds. One, option premium from retrospective relief just expired. Two, prospective relief brings up political risk, but the severity of it is arguable given variant views on what happens next - as soon as Collins, to November election results, to how much can get done by January (settlement, consent decree, etc.?), and the projected direction of MC’s successor.
But at a minimum this is more negative than neutral for loss of optionality and higher (confirmed) uncertainty.
This, taken with MC’s interview last week wrt setting expectations (of a potential successor and timing of the reipo) is disheartening. That said, I’m in the camp that 6 months (and hopefully more given SCOTUS comment that The FHFA is nuanced from CFPB given the GSEs are not private actors) is still time to move us along where today’s SCOTUS opinion will have no impact to our thesis. And the minimal price action in both the preferreds and commons suggest such.
(Off the soapbox)
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