Replies to post #749703 on Fannie Mae-No Politics (FNMA)

[kthomp19]

No it's not.

Yes it is. None of the rest of your post contradicts what LuLeVan said, that the seniors have to be restructured before FnF can exit conservatorship (at least before 2040). Instead you only focused on the junior prefs and commons for some reason.

We went into this with NO ONE being treated special, both shares classes crapped on. We come out tye other end the same.

BUT, when release news does start to be leaked, commons will definitely defy their gravity suit.

This is not how JPS (preffereds operate)

Prefs had zero advantages going into this, so did commons, and that is how we come out.

You contradicted yourself here. Are the commons and juniors the same or are they not?

The first and last sentences are logical fallacies anyway. The treatment of the juniors and commons going into conservatorship doesn't have to have anything to do with the way they will be treated coming out.

There is no definite reason or advantage to converting anyone.

Sure there is. A junior-to-common conversion would allow FnF to have up to $33B of their capital raise be in non-cumulative preferred shares. Without the conversion it has to be 100% common. That's an ironclad fact due to FHFA's capital rule.