Replies to post #751651 on Fannie Mae-No Politics (FNMA)

[familymang]

The senior preferreds essentially become super warrants to take >90% of the common instead of 80%. Like i explained in previous post, senior preferred LP = ~$290b, junior preferred LP = ~$30b, for a total LP of $320b. If the GSEs are only worth $250b (25b annual earnings x 10x p/e), in an EQUAL conversion, both senior preferred and junior preferred would take a ~20% haircut to PAR since $250b < $320b, and leaves little to no value for the common (and by extension the government warrants, which is irrelevant for them because the senior preferred conversion gave them >90% ownership of equity which is > than the warrants could have at 79.99%).

"But if they change the structure in congress then the SPSA is toast due to (self dealing) so they would have to convert that before they make any change to an agency"

This is 100% incorrect, please stop listening to ano, as I tried to warn other users on here over the last year or so, he has no idea what hes talking about at all.

[stockprofitter]

PAR for JPS is $1

Read.