Replies to post #751653 on Fannie Mae-No Politics (FNMA)

[Ace Trader]

More questions for you if you don't mind.
Thank you for answering so late on a Sunday night .
I'm outta posts for today.

But timing for the conversion would have to be done before SCOTUS acts and before the structures are changed ? Right ?

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

[Ace Trader]

Thanks for your value information of the law and proceedings. If what you posted here

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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%).
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turns out how the Gov wants to play it then a 20% haircut on JPS to Par is not bad !!! But commons will get killed in a conversion.

Still my biggest question is what would be the common share float after such a conversion?

Current common shares would be converted at what ratio ?

Was the SPSA 1 billion shares? or was that the warrants ? Just trying to figure out what the share count would be a share price based on Market Caps

That would also leave the door open to the companies offering NEW Preferred shares.