Replies to post #693546 on Fannie Mae-No Politics (FNMA)

[Louie_Louie]

Spot on!

Conversion of Sr Pref into Commons is not available per existing terms. If they are converted at any price other than the current market price, it is a takings.

[PennMilitia]

FNMA and FMCC should buy back warrants now

This whole thing about these warrants is ridiculous.

[Donotunderstand]

yes - based on current common PPS

but if GOV wanted to exercise WTS and sell 4B shares - it would IMO IMO note something like --- this will be the MAX number of shares in any eventual equity owned Fannie Mae - no SPO

that would increase our PPS and theirs to say 3 or ?

then if they added a lower capital reserve level needed at the same time?

so PPS right now can change fast IMO - if GOV wants more money for its WTS

[whitecorona]

Right now without conversion ITS ALREADY TAKING. FnF paid OVER than what they owed+interest already by 30B+ , remember this is not including total 150B+ that about 20 TBTF BANKS paid in fine 5 yrs ago or so... If Gov exercising warrant / Sr Pref, then its double taking. The court matters now taking about taking now which the lower courts will review the damage which include these 30B things.
Ackman is correct - he was thinking more conservative understanding Gov is greedy and exc the warrant.. but that before all courts started ... i dont believe he will agree on exc Sr Pref.... the longer this is the better we are .. I think this goes to Jr and Common shareholders.

It just some(not all) GREEDY JR Pref dream they can kill common and get out jail card with gold bar... it just a wet dream and complete moronic thinking.

[kthomp19]

Warrants expire in 2027 if no action is taken. If they are exercised now, they are worth less than 5 B (based on current stock price around $1).

Warrant expiration is in September 2028, 20 years after issuance.

Presumably, the purpose of Treasury exercising the warrants would be to "enhance taxpayer value", as they have said before. That means that while the 7.2B warrant shares would be worth around $7.2B right now (though quite a bit less in actual realized value if Treasury were to dump all the shares on the market at once), it would make little sense for Treasury to immediately sell those shares when the warrant exercise would likely be in conjunction with recap and release, making the commons somewhat more valuable.

Conversion of Sr Pref into Commons is not available per existing terms.

Not unilaterally by Treasury. It is possible with the agreement of FHFA. The existing terms are no bar to a conversion at all.

The same is true for the juniors.

If they are converted at any price other than the current market price, it is a takings.

Why do you say this? And what quantifiable damages would the putative plaintiffs have suffered?