Replies to post #701913 on Fannie Mae-No Politics (FNMA)

[bradford86]

So you are proposing face value does not matter in a restructuring?

If common are worth more than $2; the restructuring needs to settle the preferred lawsuits

While there are many ways to do this, I think the first thing to look at is how you look at legal outcomes

For the breach of contract claims, those contracts were breached in 2012 and every year since then is worth a simple 6% interest. So about 150% of par. And then i think that does not include damages

Nowhere in there is yield terms. Just par

But if you start looking at other potential scenarios, perhaps the distribution terms matter

What sort of scenarios are you considering and what are your assumptions? Above is what I am expecting, based on my analysis and conversations with lawyers.

[nats1]

I don't disagree with the conversion... but bro you really gotta swap out of those low interest ones and get into the higher interest ones.

I would say that all of the JPS most likely will receive a haircut

https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf

First off - nothing is going to happen until all these lawsuits get further along. We will see.

I know this was brought up before, but its possible that, whether redeemed or converted, there is an excellent chance that all rates get treated equally as the variable rate JPS that are below a 4% floor represent only something like 8% of the total par value of JPS. I have a mix of rates, but the longer this goes on, the more I am convinced the rate does not matter. But I am standing pat with what I have both common and JPS.

Nats